Correlation Between SunCar Technology and Kingsway Financial

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

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

Diversification Opportunities for SunCar Technology and Kingsway Financial

-0.07

Correlation Coefficient

SunCar Technology  Kingsway Financial

Good diversification

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

Pair Corralation between SunCar Technology and Kingsway Financial

Considering the 90-day investment horizon SunCar Technology Group is expected to under-perform the Kingsway Financial. In addition to that, SunCar Technology is 2.41 times more volatile than Kingsway Financial Services. It trades about 0.0 of its total potential returns per unit of risk. Kingsway Financial Services is currently generating about 0.06 per unit of volatility. If you would invest  790.00  in Kingsway Financial Services on September 16, 2024 and sell it today you would earn a total of  46.00  from holding Kingsway Financial Services or generate 5.82% return on investment over 90 days.

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

SunCar Technology Group  vs.  Kingsway Financial Services

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.

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.

Pair Trading with SunCar Technology and Kingsway Financial

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

The idea behind SunCar Technology Group and Kingsway Financial Services 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.