Correlation Between Kingsway Financial and Uxin

Can any of the company-specific risk be diversified away by investing in both Kingsway Financial and Uxin 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 Uxin 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 Uxin, you can compare the effects of market volatilities on Kingsway Financial and Uxin 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 Uxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and Uxin.

Diversification Opportunities for Kingsway Financial and Uxin

0.26

Correlation Coefficient

Kingsway Financial  Uxin

Modest diversification

The 3 months correlation between Kingsway and Uxin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and Uxin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxin 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 Uxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uxin has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and Uxin go up and down completely randomly.

Pair Corralation between Kingsway Financial and Uxin

Considering the 90-day investment horizon Kingsway Financial Services is expected to generate 0.45 times more return on investment than Uxin. However, Kingsway Financial Services is 2.21 times less risky than Uxin. It trades about -0.03 of its potential returns per unit of risk. Uxin is currently generating about -0.04 per unit of risk. If you would invest  846.00  in Kingsway Financial Services on December 28, 2024 and sell it today you would lose (41.00) from holding Kingsway Financial Services or give up 4.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kingsway Financial Services  vs.  Uxin

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.

Uxin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uxin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Kingsway Financial and Uxin

The main advantage of trading using opposite Kingsway Financial and Uxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingsway Financial position performs unexpectedly, Uxin 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 Uxin will offset losses from the drop in Uxin's long position.

The idea behind Kingsway Financial Services and Uxin 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.