Correlation Between Kingstone Companies and Husqvarna

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

By analyzing existing cross correlation between Kingstone Companies and Husqvarna AB, you can compare the effects of market volatilities on Kingstone Companies and Husqvarna 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 Husqvarna. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingstone Companies and Husqvarna.

Diversification Opportunities for Kingstone Companies and Husqvarna

-0.83

Correlation Coefficient

Kingstone Companies  Husqvarna

Pay attention - limited upside

The 3 months correlation between Kingstone and Husqvarna is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kingstone Companies and Husqvarna AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Husqvarna AB 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 Husqvarna. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Husqvarna AB has no effect on the direction of Kingstone Companies i.e., Kingstone Companies and Husqvarna go up and down completely randomly.

Pair Corralation between Kingstone Companies and Husqvarna

Given the investment horizon of 90 days Kingstone Companies is expected to generate 1.02 times more return on investment than Husqvarna. However, Kingstone Companies is 1.02 times more volatile than Husqvarna AB. It trades about 0.11 of its potential returns per unit of risk. Husqvarna AB is currently generating about 0.01 per unit of risk. If you would invest  169.00  in Kingstone Companies on October 24, 2024 and sell it today you would earn a total of  1,390  from holding Kingstone Companies or generate 822.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	83.4%
Values	Daily Returns

Kingstone Companies  vs.  Husqvarna AB

Kingstone Companies

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingstone Companies are ranked lower than 14 (%) 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.

Husqvarna AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Husqvarna AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Husqvarna is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kingstone Companies and Husqvarna

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

The idea behind Kingstone Companies and Husqvarna 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..