Correlation Between QBE Insurance and Markel
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Markel 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 Markel 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 Markel, you can compare the effects of market volatilities on QBE Insurance and Markel 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 Markel. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Markel.
Diversification Opportunities for QBE Insurance and Markel
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QBE and Markel is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Markel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Markel 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 Markel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Markel has no effect on the direction of QBE Insurance i.e., QBE Insurance and Markel go up and down completely randomly.
Pair Corralation between QBE Insurance and Markel
Assuming the 90 days horizon QBE Insurance Group is expected to under-perform the Markel. But the stock apears to be less risky and, when comparing its historical volatility, QBE Insurance Group is 1.02 times less risky than Markel. The stock trades about -0.01 of its potential returns per unit of risk. The Markel is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 162,300 in Markel on October 19, 2024 and sell it today you would earn a total of 9,600 from holding Markel or generate 5.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Markel
Performance |
| Timeline |
| QBE Insurance Group |
| Markel |
QBE Insurance and Markel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Markel
The main advantage of trading using opposite QBE Insurance and Markel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Markel 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 Markel will offset losses from the drop in Markel's long position.| QBE Insurance vs. SWISS WATER DECAFFCOFFEE | QBE Insurance vs. BROADWIND ENRGY | QBE Insurance vs. Broadridge Financial Solutions | QBE Insurance vs. Gaztransport Technigaz SA |
| Markel vs. The Progressive | Markel vs. The Allstate | Markel vs. PICC Property and | Markel vs. Cincinnati Financial |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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