Correlation Between Kennedy Wilson and Doma Holdings

Can any of the company-specific risk be diversified away by investing in both Kennedy Wilson and Doma Holdings 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 Kennedy Wilson and Doma Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kennedy Wilson Holdings and Doma Holdings, you can compare the effects of market volatilities on Kennedy Wilson and Doma Holdings 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 Kennedy Wilson with a short position of Doma Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kennedy Wilson and Doma Holdings.

Diversification Opportunities for Kennedy Wilson and Doma Holdings

-0.39

Correlation Coefficient

Kennedy Wilson  Doma Holdings

Very good diversification

The 3 months correlation between Kennedy and Doma is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kennedy Wilson Holdings and Doma Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Doma Holdings and Kennedy Wilson 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 Kennedy Wilson Holdings are associated (or correlated) with Doma Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Doma Holdings has no effect on the direction of Kennedy Wilson i.e., Kennedy Wilson and Doma Holdings go up and down completely randomly.

Pair Corralation between Kennedy Wilson and Doma Holdings

Allowing for the 90-day total investment horizon Kennedy Wilson Holdings is expected to generate 5.95 times more return on investment than Doma Holdings. However, Kennedy Wilson is 5.95 times more volatile than Doma Holdings. It trades about 0.12 of its potential returns per unit of risk. Doma Holdings is currently generating about -0.08 per unit of risk. If you would invest  834.00  in Kennedy Wilson Holdings on February 2, 2024 and sell it today you would earn a total of  42.00  from holding Kennedy Wilson Holdings or generate 5.04% return on investment over 90 days.

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

Kennedy Wilson Holdings  vs.  Doma Holdings

Kennedy Wilson Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kennedy Wilson Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Doma Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Doma Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain primary indicators, Doma Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kennedy Wilson and Doma Holdings

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

The idea behind Kennedy Wilson Holdings and Doma Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.