Correlation Between Kingstone Companies and Canterbury Park

Can any of the company-specific risk be diversified away by investing in both Kingstone Companies and Canterbury Park 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 Kingstone Companies and Canterbury Park into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingstone Companies and Canterbury Park Holding, you can compare the effects of market volatilities on Kingstone Companies and Canterbury Park 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 Kingstone Companies with a short position of Canterbury Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstone Companies and Canterbury Park.

Diversification Opportunities for Kingstone Companies and Canterbury Park

0.86

Correlation Coefficient

Kingstone Companies  Canterbury Park

Very poor diversification

The 3 months correlation between Kingstone and Canterbury is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Kingstone Companies and Canterbury Park Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canterbury Park Holding and Kingstone Companies 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 Kingstone Companies are associated (or correlated) with Canterbury Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canterbury Park Holding has no effect on the direction of Kingstone Companies i.e., Kingstone Companies and Canterbury Park go up and down completely randomly.

Pair Corralation between Kingstone Companies and Canterbury Park

Given the investment horizon of 90 days Kingstone Companies is expected to under-perform the Canterbury Park. In addition to that, Kingstone Companies is 1.65 times more volatile than Canterbury Park Holding. It trades about -0.02 of its total potential returns per unit of risk. Canterbury Park Holding is currently generating about 0.05 per unit of volatility. If you would invest  2,044  in Canterbury Park Holding on October 11, 2024 and sell it today you would earn a total of  40.00  from holding Canterbury Park Holding or generate 1.96% return on investment over 90 days.

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

Kingstone Companies  vs.  Canterbury Park Holding

Kingstone Companies

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingstone Companies are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Kingstone Companies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Canterbury Park Holding

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Canterbury Park Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Canterbury Park exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingstone Companies and Canterbury Park

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

The idea behind Kingstone Companies and Canterbury Park Holding 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.