Correlation Between Kinsale Capital and NBCUNIVERSAL

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

Diversification Opportunities for Kinsale Capital and NBCUNIVERSAL

0.06

Correlation Coefficient

Kinsale Capital  NBCUNIVERSAL

Significant diversification

The 3 months correlation between Kinsale and NBCUNIVERSAL is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and NBCUNIVERSAL MEDIA LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBCUNIVERSAL MEDIA LLC 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 NBCUNIVERSAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBCUNIVERSAL MEDIA LLC has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and NBCUNIVERSAL go up and down completely randomly.

Pair Corralation between Kinsale Capital and NBCUNIVERSAL

Given the investment horizon of 90 days Kinsale Capital Group is expected to under-perform the NBCUNIVERSAL. In addition to that, Kinsale Capital is 1.04 times more volatile than NBCUNIVERSAL MEDIA LLC. It trades about -0.19 of its total potential returns per unit of risk. NBCUNIVERSAL MEDIA LLC is currently generating about 0.36 per unit of volatility. If you would invest  10,154  in NBCUNIVERSAL MEDIA LLC on October 22, 2024 and sell it today you would earn a total of  638.00  from holding NBCUNIVERSAL MEDIA LLC or generate 6.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.56%
Values	Daily Returns

Kinsale Capital Group  vs.  NBCUNIVERSAL MEDIA LLC

Kinsale Capital Group

Risk-Adjusted Performance

0 of 100

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.

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NBCUNIVERSAL MEDIA LLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, NBCUNIVERSAL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Kinsale Capital and NBCUNIVERSAL

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

The idea behind Kinsale Capital Group and NBCUNIVERSAL MEDIA LLC 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.