Correlation Between Grocery Outlet and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Grocery Outlet 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 Grocery Outlet and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grocery Outlet Holding and QBE Insurance Group, you can compare the effects of market volatilities on Grocery Outlet 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 Grocery Outlet with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grocery Outlet and QBE Insurance.
Diversification Opportunities for Grocery Outlet and QBE Insurance
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grocery and QBE is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Grocery Outlet Holding 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 Grocery Outlet 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 Grocery Outlet Holding 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 Grocery Outlet i.e., Grocery Outlet and QBE Insurance go up and down completely randomly.
Pair Corralation between Grocery Outlet and QBE Insurance
Allowing for the 90-day total investment horizon Grocery Outlet Holding is expected to generate 3.88 times more return on investment than QBE Insurance. However, Grocery Outlet is 3.88 times more volatile than QBE Insurance Group. It trades about 0.44 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.22 per unit of risk. If you would invest 1,505 in Grocery Outlet Holding on September 2, 2024 and sell it today you would earn a total of 595.00 from holding Grocery Outlet Holding or generate 39.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grocery Outlet Holding vs. QBE Insurance Group
Performance |
| Timeline |
| Grocery Outlet Holding |
| QBE Insurance Group |
Grocery Outlet and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grocery Outlet and QBE Insurance
The main advantage of trading using opposite Grocery Outlet and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grocery Outlet 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.| Grocery Outlet vs. Natural Grocers by | Grocery Outlet vs. Village Super Market | Grocery Outlet vs. Ingles Markets Incorporated | Grocery Outlet vs. Ocado Group plc |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |