Correlation Between Progressive and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Progressive 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 Progressive and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Progressive and QBE Insurance Group, you can compare the effects of market volatilities on Progressive 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 Progressive with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progressive and QBE Insurance.
Diversification Opportunities for Progressive and QBE Insurance
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Progressive and QBE is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding The Progressive 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 Progressive 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 The Progressive 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 Progressive i.e., Progressive and QBE Insurance go up and down completely randomly.
Pair Corralation between Progressive and QBE Insurance
Assuming the 90 days horizon Progressive is expected to generate 1.77 times less return on investment than QBE Insurance. In addition to that, Progressive is 1.14 times more volatile than QBE Insurance Group. It trades about 0.16 of its total potential returns per unit of risk. QBE Insurance Group is currently generating about 0.32 per unit of volatility. If you would invest 1,010 in QBE Insurance Group on August 28, 2024 and sell it today you would earn a total of 210.00 from holding QBE Insurance Group or generate 20.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Progressive vs. QBE Insurance Group
Performance |
| Timeline |
| Progressive |
| QBE Insurance Group |
Progressive and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progressive and QBE Insurance
The main advantage of trading using opposite Progressive and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progressive 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.| Progressive vs. Superior Plus Corp | Progressive vs. NMI Holdings | Progressive vs. Origin Agritech | Progressive vs. SIVERS SEMICONDUCTORS AB |
| QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. Origin Agritech | QBE Insurance vs. SIVERS SEMICONDUCTORS AB |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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