Correlation Between 126408HH9 and Kinsale Capital

Can any of the company-specific risk be diversified away by investing in both 126408HH9 and Kinsale Capital 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 126408HH9 and Kinsale Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CSX P 325 and Kinsale Capital Group, you can compare the effects of market volatilities on 126408HH9 and Kinsale Capital 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 126408HH9 with a short position of Kinsale Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of 126408HH9 and Kinsale Capital.

Diversification Opportunities for 126408HH9 and Kinsale Capital

0.05

Correlation Coefficient

126408HH9  Kinsale Capital

Significant diversification

The 3 months correlation between 126408HH9 and Kinsale is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CSX P 325 and Kinsale Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinsale Capital Group and 126408HH9 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 CSX P 325 are associated (or correlated) with Kinsale Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinsale Capital Group has no effect on the direction of 126408HH9 i.e., 126408HH9 and Kinsale Capital go up and down completely randomly.

Pair Corralation between 126408HH9 and Kinsale Capital

Assuming the 90 days trading horizon 126408HH9 is expected to generate 1.88 times less return on investment than Kinsale Capital. But when comparing it to its historical volatility, CSX P 325 is 10.64 times less risky than Kinsale Capital. It trades about 0.06 of its potential returns per unit of risk. Kinsale Capital Group is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  44,178  in Kinsale Capital Group on October 5, 2024 and sell it today you would lose (1,346) from holding Kinsale Capital Group or give up 3.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.35%
Values	Daily Returns

CSX P 325  vs.  Kinsale Capital Group

CSX P 325

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSX P 325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 126408HH9 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Kinsale Capital Group

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with 126408HH9 and Kinsale Capital

The main advantage of trading using opposite 126408HH9 and Kinsale Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 126408HH9 position performs unexpectedly, Kinsale Capital 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 Kinsale Capital will offset losses from the drop in Kinsale Capital's long position.

The idea behind CSX P 325 and Kinsale Capital Group 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.