Correlation Between QBE Insurance and LOANDEPOT INC
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and LOANDEPOT INC 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 LOANDEPOT INC 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 LOANDEPOT INC A, you can compare the effects of market volatilities on QBE Insurance and LOANDEPOT INC 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 LOANDEPOT INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and LOANDEPOT INC.
Diversification Opportunities for QBE Insurance and LOANDEPOT INC
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between QBE and LOANDEPOT is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and LOANDEPOT INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOANDEPOT INC A 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 LOANDEPOT INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOANDEPOT INC A has no effect on the direction of QBE Insurance i.e., QBE Insurance and LOANDEPOT INC go up and down completely randomly.
Pair Corralation between QBE Insurance and LOANDEPOT INC
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.29 times more return on investment than LOANDEPOT INC. However, QBE Insurance Group is 3.45 times less risky than LOANDEPOT INC. It trades about 0.2 of its potential returns per unit of risk. LOANDEPOT INC A is currently generating about -0.12 per unit of risk. If you would invest 1,160 in QBE Insurance Group on November 3, 2024 and sell it today you would earn a total of 60.00 from holding QBE Insurance Group or generate 5.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. LOANDEPOT INC A
Performance |
| Timeline |
| QBE Insurance Group |
| LOANDEPOT INC A |
QBE Insurance and LOANDEPOT INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and LOANDEPOT INC
The main advantage of trading using opposite QBE Insurance and LOANDEPOT INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, LOANDEPOT INC 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 LOANDEPOT INC will offset losses from the drop in LOANDEPOT INC's long position.| QBE Insurance vs. CanSino Biologics | QBE Insurance vs. WIMFARM SA EO | QBE Insurance vs. ALEFARM BREWING DK 05 | QBE Insurance vs. Fukuyama Transporting Co |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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