Correlation Between QBE Insurance and GAMESTOP
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and GAMESTOP 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 GAMESTOP 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 GAMESTOP, you can compare the effects of market volatilities on QBE Insurance and GAMESTOP 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 GAMESTOP. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and GAMESTOP.
Diversification Opportunities for QBE Insurance and GAMESTOP
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QBE and GAMESTOP is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and GAMESTOP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GAMESTOP 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 GAMESTOP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GAMESTOP has no effect on the direction of QBE Insurance i.e., QBE Insurance and GAMESTOP go up and down completely randomly.
Pair Corralation between QBE Insurance and GAMESTOP
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.39 times more return on investment than GAMESTOP. However, QBE Insurance Group is 2.57 times less risky than GAMESTOP. It trades about 0.21 of its potential returns per unit of risk. GAMESTOP is currently generating about -0.25 per unit of risk. If you would invest 1,150 in QBE Insurance Group on October 25, 2024 and sell it today you would earn a total of 50.00 from holding QBE Insurance Group or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. GAMESTOP
Performance |
| Timeline |
| QBE Insurance Group |
| GAMESTOP |
QBE Insurance and GAMESTOP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and GAMESTOP
The main advantage of trading using opposite QBE Insurance and GAMESTOP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, GAMESTOP 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 GAMESTOP will offset losses from the drop in GAMESTOP's long position.| QBE Insurance vs. ANTA SPORTS PRODUCT | QBE Insurance vs. TITANIUM TRANSPORTGROUP | QBE Insurance vs. ASPEN TECHINC DL | QBE Insurance vs. PARKEN Sport Entertainment |
| GAMESTOP vs. QBE Insurance Group | GAMESTOP vs. VIENNA INSURANCE GR | GAMESTOP vs. SBI Insurance Group | GAMESTOP vs. United Rentals |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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