Correlation Between QBE Insurance and Live Nation
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Live Nation 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 Live Nation 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 Live Nation Entertainment, you can compare the effects of market volatilities on QBE Insurance and Live Nation 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 Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Live Nation.
Diversification Opportunities for QBE Insurance and Live Nation
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QBE and Live is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of QBE Insurance i.e., QBE Insurance and Live Nation go up and down completely randomly.
Pair Corralation between QBE Insurance and Live Nation
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.99 times more return on investment than Live Nation. However, QBE Insurance Group is 1.01 times less risky than Live Nation. It trades about 0.06 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about -0.16 per unit of risk. If you would invest 1,140 in QBE Insurance Group on October 14, 2024 and sell it today you would earn a total of 10.00 from holding QBE Insurance Group or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Live Nation Entertainment
Performance |
| Timeline |
| QBE Insurance Group |
| Live Nation Entertainment |
QBE Insurance and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Live Nation
The main advantage of trading using opposite QBE Insurance and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| QBE Insurance vs. WESANA HEALTH HOLD | QBE Insurance vs. RCI Hospitality Holdings | QBE Insurance vs. Suntory Beverage Food | QBE Insurance vs. Acadia Healthcare |
| Live Nation vs. INDO RAMA SYNTHETIC | Live Nation vs. Goosehead Insurance | Live Nation vs. QBE Insurance Group | Live Nation vs. CHEMICAL INDUSTRIES |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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