Correlation Between Kinsale Capital and Splitit Payments

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

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

Diversification Opportunities for Kinsale Capital and Splitit Payments

-0.02

Correlation Coefficient

Kinsale Capital  Splitit Payments

Good diversification

The 3 months correlation between Kinsale and Splitit is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Splitit Payments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Splitit Payments and Kinsale Capital 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 Kinsale Capital Group are associated (or correlated) with Splitit Payments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Splitit Payments has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Splitit Payments go up and down completely randomly.

Pair Corralation between Kinsale Capital and Splitit Payments

Given the investment horizon of 90 days Kinsale Capital Group is not expected to generate positive returns. However, Kinsale Capital Group is 64.51 times less risky than Splitit Payments. It waists most of its returns potential to compensate for thr risk taken. Splitit Payments is generating about 0.13 per unit of risk. If you would invest  0.00  in Splitit Payments on December 21, 2024 and sell it today you would earn a total of  0.01  from holding Splitit Payments or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Kinsale Capital Group  vs.  Splitit Payments

Kinsale Capital Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinsale Capital Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kinsale Capital is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Splitit Payments

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Splitit Payments are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Splitit Payments reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinsale Capital and Splitit Payments

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

The idea behind Kinsale Capital Group and Splitit Payments 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.

Check out your portfolio center.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.