Correlation Between Kingsway Financial and ENTERPRISE

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

Diversification Opportunities for Kingsway Financial and ENTERPRISE

0.04

Correlation Coefficient

Kingsway Financial  ENTERPRISE

Significant diversification

The 3 months correlation between Kingsway and ENTERPRISE is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kingsway Financial Services and ENTERPRISE PRODS OPER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTERPRISE PRODS OPER 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 ENTERPRISE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTERPRISE PRODS OPER has no effect on the direction of Kingsway Financial i.e., Kingsway Financial and ENTERPRISE go up and down completely randomly.

Pair Corralation between Kingsway Financial and ENTERPRISE

Considering the 90-day investment horizon Kingsway Financial Services is expected to generate 5.72 times more return on investment than ENTERPRISE. However, Kingsway Financial is 5.72 times more volatile than ENTERPRISE PRODS OPER. It trades about 0.17 of its potential returns per unit of risk. ENTERPRISE PRODS OPER is currently generating about 0.14 per unit of risk. If you would invest  1,040  in Kingsway Financial Services on May 18, 2025 and sell it today you would earn a total of  352.00  from holding Kingsway Financial Services or generate 33.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.16%
Values	Daily Returns

Kingsway Financial Services  vs.  ENTERPRISE PRODS OPER

Kingsway Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsway Financial Services are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Kingsway Financial unveiled solid returns over the last few months and may actually be approaching a breakup point.

ENTERPRISE PRODS OPER

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in ENTERPRISE PRODS OPER are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, ENTERPRISE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kingsway Financial and ENTERPRISE

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

The idea behind Kingsway Financial Services and ENTERPRISE PRODS OPER 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..