Correlation Between Kinsale Capital and Zerify

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

Diversification Opportunities for Kinsale Capital and Zerify

0.29

Correlation Coefficient

Kinsale Capital  Zerify

Modest diversification

The 3 months correlation between Kinsale and Zerify is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and Zerify Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zerify Inc 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 Zerify. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zerify Inc has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and Zerify go up and down completely randomly.

Pair Corralation between Kinsale Capital and Zerify

Given the investment horizon of 90 days Kinsale Capital is expected to generate 67.14 times less return on investment than Zerify. But when comparing it to its historical volatility, Kinsale Capital Group is 36.67 times less risky than Zerify. It trades about 0.05 of its potential returns per unit of risk. Zerify Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.54  in Zerify Inc on October 10, 2024 and sell it today you would lose (0.53) from holding Zerify Inc or give up 98.15% of portfolio value over 90 days.

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

Kinsale Capital Group  vs.  Zerify Inc

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 latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Zerify Inc

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zerify Inc are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, Zerify showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kinsale Capital and Zerify

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

The idea behind Kinsale Capital Group and Zerify Inc 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.