Correlation Between QBE Insurance and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and EMBARK EDUCATION 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 EMBARK EDUCATION 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 EMBARK EDUCATION LTD, you can compare the effects of market volatilities on QBE Insurance and EMBARK EDUCATION 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 EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and EMBARK EDUCATION.
Diversification Opportunities for QBE Insurance and EMBARK EDUCATION
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and EMBARK is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD 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 EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of QBE Insurance i.e., QBE Insurance and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between QBE Insurance and EMBARK EDUCATION
Assuming the 90 days horizon QBE Insurance Group is expected to generate 2.5 times more return on investment than EMBARK EDUCATION. However, QBE Insurance is 2.5 times more volatile than EMBARK EDUCATION LTD. It trades about 0.09 of its potential returns per unit of risk. EMBARK EDUCATION LTD is currently generating about 0.12 per unit of risk. If you would invest 929.00 in QBE Insurance Group on November 7, 2024 and sell it today you would earn a total of 321.00 from holding QBE Insurance Group or generate 34.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
QBE Insurance Group vs. EMBARK EDUCATION LTD
Performance |
| Timeline |
| QBE Insurance Group |
| EMBARK EDUCATION LTD |
QBE Insurance and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and EMBARK EDUCATION
The main advantage of trading using opposite QBE Insurance and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, EMBARK EDUCATION 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION's long position.| QBE Insurance vs. CALTAGIRONE EDITORE | QBE Insurance vs. The Yokohama Rubber | QBE Insurance vs. Summit Materials | QBE Insurance vs. NEWELL RUBBERMAID |
| EMBARK EDUCATION vs. PRECISION DRILLING P | EMBARK EDUCATION vs. Major Drilling Group | EMBARK EDUCATION vs. Western Copper and | EMBARK EDUCATION vs. GREENX METALS LTD |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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