Correlation Between GungHo Online and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both GungHo Online 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 GungHo Online and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GungHo Online Entertainment and QBE Insurance Group, you can compare the effects of market volatilities on GungHo Online 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 GungHo Online with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of GungHo Online and QBE Insurance.
Diversification Opportunities for GungHo Online and QBE Insurance
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GungHo and QBE is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GungHo Online Entertainment 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 GungHo Online 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 GungHo Online Entertainment 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 GungHo Online i.e., GungHo Online and QBE Insurance go up and down completely randomly.
Pair Corralation between GungHo Online and QBE Insurance
Assuming the 90 days horizon GungHo Online Entertainment is expected to under-perform the QBE Insurance. In addition to that, GungHo Online is 1.97 times more volatile than QBE Insurance Group. It trades about -0.08 of its total potential returns per unit of risk. QBE Insurance Group is currently generating about 0.22 per unit of volatility. If you would invest 1,150 in QBE Insurance Group on October 28, 2024 and sell it today you would earn a total of 60.00 from holding QBE Insurance Group or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GungHo Online Entertainment vs. QBE Insurance Group
Performance |
| Timeline |
| GungHo Online Entert |
| QBE Insurance Group |
GungHo Online and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GungHo Online and QBE Insurance
The main advantage of trading using opposite GungHo Online and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GungHo Online 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.| GungHo Online vs. REVO INSURANCE SPA | GungHo Online vs. Insurance Australia Group | GungHo Online vs. Nordic Semiconductor ASA | GungHo Online vs. UNIQA INSURANCE GR |
| QBE Insurance vs. PICC Property and | QBE Insurance vs. Fairfax Financial Holdings | QBE Insurance vs. Insurance Australia Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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