Correlation Between Kingsway Financial and Shift Technologies

Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and Shift Technologies at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Kingsway Financial and Shift Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingsway Financial Services and Shift Technologies, you can compare the effects of market volatilities on Kingsway Financial and Shift Technologies and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Kingsway Financial with a short position of Shift Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and Shift Technologies.

Diversification Opportunities for Kingsway Financial and Shift Technologies

0.0

Correlation Coefficient

Kingsway Financial  Shift Technologies

Pay attention - limited upside

The 3 months correlation between Kingsway and Shift is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and Shift Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shift Technologies and Kingsway Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Kingsway Financial Services are associated (or correlated) with Shift Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shift Technologies has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and Shift Technologies go up and down completely randomly.

Pair Corralation between Kingsway Financial and Shift Technologies

If you would invest (100.00) in Shift Technologies on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Shift Technologies or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Kingsway Financial Services  vs.  Shift Technologies

Kingsway Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kingsway Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Kingsway Financial is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Shift Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shift Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Shift Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Kingsway Financial and Shift Technologies

The main advantage of trading using opposite Kingsway Financial and Shift Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, Shift Technologies can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shift Technologies will offset losses from the drop in Shift Technologies' long position.

The idea behind Kingsway Financial Services and Shift Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.