Correlation Between QBE Insurance and CSSC Offshore
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and CSSC Offshore 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 CSSC Offshore 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 CSSC Offshore Marine, you can compare the effects of market volatilities on QBE Insurance and CSSC Offshore 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 CSSC Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and CSSC Offshore.
Diversification Opportunities for QBE Insurance and CSSC Offshore
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QBE and CSSC is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and CSSC Offshore Marine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSSC Offshore Marine 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 CSSC Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSSC Offshore Marine has no effect on the direction of QBE Insurance i.e., QBE Insurance and CSSC Offshore go up and down completely randomly.
Pair Corralation between QBE Insurance and CSSC Offshore
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.45 times more return on investment than CSSC Offshore. However, QBE Insurance Group is 2.2 times less risky than CSSC Offshore. It trades about 0.08 of its potential returns per unit of risk. CSSC Offshore Marine is currently generating about 0.01 per unit of risk. If you would invest 1,024 in QBE Insurance Group on September 3, 2024 and sell it today you would earn a total of 196.00 from holding QBE Insurance Group or generate 19.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. CSSC Offshore Marine
Performance |
| Timeline |
| QBE Insurance Group |
| CSSC Offshore Marine |
QBE Insurance and CSSC Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and CSSC Offshore
The main advantage of trading using opposite QBE Insurance and CSSC Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, CSSC Offshore 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 CSSC Offshore will offset losses from the drop in CSSC Offshore's long position.| QBE Insurance vs. INFORMATION SVC GRP | QBE Insurance vs. Fidelity National Information | QBE Insurance vs. PUBLIC STORAGE PRFO | QBE Insurance vs. DOCDATA |
| CSSC Offshore vs. SBA Communications Corp | CSSC Offshore vs. FIREWEED METALS P | CSSC Offshore vs. Jacquet Metal Service | CSSC Offshore vs. Shenandoah Telecommunications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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