Correlation Between Novanta and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Novanta and QBE Insurance 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 Novanta and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Novanta and QBE Insurance Group, you can compare the effects of market volatilities on Novanta and QBE Insurance 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 Novanta with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Novanta and QBE Insurance.
Diversification Opportunities for Novanta and QBE Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Novanta and QBE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Novanta and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group and Novanta 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 Novanta are associated (or correlated) with QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of Novanta i.e., Novanta and QBE Insurance go up and down completely randomly.
Pair Corralation between Novanta and QBE Insurance
Assuming the 90 days trading horizon Novanta is expected to generate 919.11 times less return on investment than QBE Insurance. In addition to that, Novanta is 1.75 times more volatile than QBE Insurance Group. It trades about 0.0 of its total potential returns per unit of risk. QBE Insurance Group is currently generating about 0.57 per unit of volatility. If you would invest 1,020 in QBE Insurance Group on September 2, 2024 and sell it today you would earn a total of 200.00 from holding QBE Insurance Group or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Novanta vs. QBE Insurance Group
Performance |
| Timeline |
| Novanta |
| QBE Insurance Group |
Novanta and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Novanta and QBE Insurance
The main advantage of trading using opposite Novanta and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Novanta position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance's long position.| Novanta vs. QBE Insurance Group | Novanta vs. LIFENET INSURANCE CO | Novanta vs. SIMS METAL MGT | Novanta vs. Jacquet Metal Service |
| QBE Insurance vs. Nok Airlines PCL | QBE Insurance vs. CSSC Offshore Marine | QBE Insurance vs. GRIFFIN MINING LTD | QBE Insurance vs. United Airlines Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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