Correlation Between QBE Insurance and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Bloom Energy 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 QBE Insurance and Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between QBE Insurance Group and Bloom Energy, you can compare the effects of market volatilities on QBE Insurance and Bloom Energy 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 QBE Insurance with a short position of Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Bloom Energy.
Diversification Opportunities for QBE Insurance and Bloom Energy
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QBE and Bloom is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy and QBE Insurance 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 QBE Insurance Group are associated (or correlated) with Bloom Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Energy has no effect on the direction of QBE Insurance i.e., QBE Insurance and Bloom Energy go up and down completely randomly.
Pair Corralation between QBE Insurance and Bloom Energy
Assuming the 90 days horizon QBE Insurance is expected to generate 6.35 times less return on investment than Bloom Energy. But when comparing it to its historical volatility, QBE Insurance Group is 5.12 times less risky than Bloom Energy. It trades about 0.07 of its potential returns per unit of risk. Bloom Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,047 in Bloom Energy on November 7, 2024 and sell it today you would earn a total of 1,234 from holding Bloom Energy or generate 117.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Bloom Energy
Performance |
| Timeline |
| QBE Insurance Group |
| Bloom Energy |
QBE Insurance and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Bloom Energy
The main advantage of trading using opposite QBE Insurance and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Bloom Energy 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 Bloom Energy will offset losses from the drop in Bloom Energy's long position.| QBE Insurance vs. Cardinal Health | QBE Insurance vs. OPKO HEALTH | QBE Insurance vs. Kingdee International Software | QBE Insurance vs. MPH Health Care |
| Bloom Energy vs. Urban Outfitters | Bloom Energy vs. Penta Ocean Construction Co | Bloom Energy vs. Grupo Carso SAB | Bloom Energy vs. AGRICULTBK HADR25 YC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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