Correlation Between Kindred Group and Sinch AB

Can any of the company-specific risk be diversified away by investing in both Kindred Group and Sinch AB 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 Kindred Group and Sinch AB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kindred Group plc and Sinch AB, you can compare the effects of market volatilities on Kindred Group and Sinch AB 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 Kindred Group with a short position of Sinch AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindred Group and Sinch AB.

Diversification Opportunities for Kindred Group and Sinch AB

-0.03

Correlation Coefficient

Kindred Group  Sinch AB

Good diversification

The 3 months correlation between Kindred and Sinch is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kindred Group plc and Sinch AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinch AB and Kindred Group 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 Kindred Group plc are associated (or correlated) with Sinch AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinch AB has no effect on the direction of Kindred Group i.e., Kindred Group and Sinch AB go up and down completely randomly.

Pair Corralation between Kindred Group and Sinch AB

Assuming the 90 days trading horizon Kindred Group plc is expected to generate 0.07 times more return on investment than Sinch AB. However, Kindred Group plc is 13.44 times less risky than Sinch AB. It trades about 0.08 of its potential returns per unit of risk. Sinch AB is currently generating about -0.11 per unit of risk. If you would invest  12,740  in Kindred Group plc on September 2, 2024 and sell it today you would earn a total of  170.00  from holding Kindred Group plc or generate 1.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	78.79%
Values	Daily Returns

Kindred Group plc  vs.  Sinch AB

Kindred Group plc

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days Kindred Group plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Kindred Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Sinch AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sinch AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kindred Group and Sinch AB

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

The idea behind Kindred Group plc and Sinch AB 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.