Correlation Between Kingsway Financial and SunCar Technology

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

By analyzing existing cross correlation between Kingsway Financial Services and SunCar Technology Group, you can compare the effects of market volatilities on Kingsway Financial and SunCar Technology 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 Kingsway Financial with a short position of SunCar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsway Financial and SunCar Technology.

Diversification Opportunities for Kingsway Financial and SunCar Technology

-0.07

Correlation Coefficient

Kingsway Financial  SunCar Technology

Good diversification

The 3 months correlation between Kingsway and SunCar is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and SunCar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCar Technology and Kingsway Financial 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 Kingsway Financial Services are associated (or correlated) with SunCar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCar Technology has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and SunCar Technology go up and down completely randomly.

Pair Corralation between Kingsway Financial and SunCar Technology

Considering the 90-day investment horizon Kingsway Financial Services is expected to generate 0.18 times more return on investment than SunCar Technology. However, Kingsway Financial Services is 5.67 times less risky than SunCar Technology. It trades about -0.35 of its potential returns per unit of risk. SunCar Technology Group is currently generating about -0.08 per unit of risk. If you would invest  888.00  in Kingsway Financial Services on September 16, 2024 and sell it today you would lose (52.00) from holding Kingsway Financial Services or give up 5.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kingsway Financial Services  vs.  SunCar Technology Group

Kingsway Financial

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsway Financial Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Kingsway Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SunCar Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunCar Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, SunCar Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kingsway Financial and SunCar Technology

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

The idea behind Kingsway Financial Services and SunCar Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..