Correlation Between JOHNSON SVC and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both JOHNSON SVC 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 JOHNSON SVC and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between JOHNSON SVC LS 10 and QBE Insurance Group, you can compare the effects of market volatilities on JOHNSON SVC 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 JOHNSON SVC with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of JOHNSON SVC and QBE Insurance.
Diversification Opportunities for JOHNSON SVC and QBE Insurance
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between JOHNSON and QBE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding JOHNSON SVC LS 10 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 JOHNSON SVC 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 JOHNSON SVC LS 10 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 JOHNSON SVC i.e., JOHNSON SVC and QBE Insurance go up and down completely randomly.
Pair Corralation between JOHNSON SVC and QBE Insurance
Assuming the 90 days horizon JOHNSON SVC LS 10 is expected to under-perform the QBE Insurance. In addition to that, JOHNSON SVC is 2.19 times more volatile than QBE Insurance Group. It trades about -0.05 of its total potential returns per unit of risk. QBE Insurance Group is currently generating about 0.47 per unit of volatility. If you would invest 1,040 in QBE Insurance Group on August 30, 2024 and sell it today you would earn a total of 180.00 from holding QBE Insurance Group or generate 17.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JOHNSON SVC LS 10 vs. QBE Insurance Group
Performance |
| Timeline |
| JOHNSON SVC LS |
| QBE Insurance Group |
JOHNSON SVC and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JOHNSON SVC and QBE Insurance
The main advantage of trading using opposite JOHNSON SVC and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JOHNSON SVC 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.| JOHNSON SVC vs. DICKS Sporting Goods | JOHNSON SVC vs. Ming Le Sports | JOHNSON SVC vs. BOS BETTER ONLINE | JOHNSON SVC vs. PACIFIC ONLINE |
| QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. SIVERS SEMICONDUCTORS AB | QBE Insurance vs. Talanx AG | QBE Insurance vs. 2G ENERGY |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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