Correlation Between QBE Insurance and Ladder Capital
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Ladder Capital 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 Ladder Capital 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 Ladder Capital Corp, you can compare the effects of market volatilities on QBE Insurance and Ladder Capital 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 Ladder Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Ladder Capital.
Diversification Opportunities for QBE Insurance and Ladder Capital
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QBE and Ladder is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Ladder Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladder Capital Corp 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 Ladder Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladder Capital Corp has no effect on the direction of QBE Insurance i.e., QBE Insurance and Ladder Capital go up and down completely randomly.
Pair Corralation between QBE Insurance and Ladder Capital
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.95 times more return on investment than Ladder Capital. However, QBE Insurance Group is 1.05 times less risky than Ladder Capital. It trades about 0.06 of its potential returns per unit of risk. Ladder Capital Corp is currently generating about 0.05 per unit of risk. If you would invest 753.00 in QBE Insurance Group on September 20, 2024 and sell it today you would earn a total of 387.00 from holding QBE Insurance Group or generate 51.39% 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. Ladder Capital Corp
Performance |
| Timeline |
| QBE Insurance Group |
| Ladder Capital Corp |
QBE Insurance and Ladder Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Ladder Capital
The main advantage of trading using opposite QBE Insurance and Ladder Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Ladder Capital 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 Ladder Capital will offset losses from the drop in Ladder Capital's long position.| QBE Insurance vs. INTERCONT HOTELS | QBE Insurance vs. Highlight Communications AG | QBE Insurance vs. Spirent Communications plc | QBE Insurance vs. MELIA HOTELS |
| Ladder Capital vs. TRAINLINE PLC LS | Ladder Capital vs. QBE Insurance Group | Ladder Capital vs. Commonwealth Bank of | Ladder Capital vs. BANKINTER ADR 2007 |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |