Correlation Between Kinsale Capital and W R

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

Diversification Opportunities for Kinsale Capital and W R

-0.25
  Correlation Coefficient

Very good diversification

The 3 months correlation between Kinsale and WRB-PE is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kinsale Capital Group and W R Berkley in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on W R Berkley 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 W R. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of W R Berkley has no effect on the direction of Kinsale Capital i.e., Kinsale Capital and W R go up and down completely randomly.

Pair Corralation between Kinsale Capital and W R

Given the investment horizon of 90 days Kinsale Capital Group is expected to generate 3.15 times more return on investment than W R. However, Kinsale Capital is 3.15 times more volatile than W R Berkley. It trades about 0.14 of its potential returns per unit of risk. W R Berkley is currently generating about 0.05 per unit of risk. If you would invest  45,213  in Kinsale Capital Group on September 5, 2024 and sell it today you would earn a total of  4,578  from holding Kinsale Capital Group or generate 10.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kinsale Capital Group  vs.  W R Berkley

 Performance 
       Timeline  
Kinsale Capital Group 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Kinsale Capital Group are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Kinsale Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.
W R Berkley 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in W R Berkley are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental drivers, W R is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kinsale Capital and W R Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kinsale Capital and W R

The main advantage of trading using opposite Kinsale Capital and W R positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinsale Capital position performs unexpectedly, W R 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 W R will offset losses from the drop in W R's long position.
The idea behind Kinsale Capital Group and W R Berkley 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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