Correlation Between QBE Insurance and Progressive
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Progressive 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 Progressive 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 The Progressive, you can compare the effects of market volatilities on QBE Insurance and Progressive 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 Progressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Progressive.
Diversification Opportunities for QBE Insurance and Progressive
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QBE and Progressive is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and The Progressive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive 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 Progressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive has no effect on the direction of QBE Insurance i.e., QBE Insurance and Progressive go up and down completely randomly.
Pair Corralation between QBE Insurance and Progressive
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.83 times more return on investment than Progressive. However, QBE Insurance Group is 1.21 times less risky than Progressive. It trades about -0.01 of its potential returns per unit of risk. The Progressive is currently generating about -0.02 per unit of risk. If you would invest 1,180 in QBE Insurance Group on October 19, 2024 and sell it today you would lose (10.00) from holding QBE Insurance Group or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. The Progressive
Performance |
| Timeline |
| QBE Insurance Group |
| Progressive |
QBE Insurance and Progressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Progressive
The main advantage of trading using opposite QBE Insurance and Progressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Progressive 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 Progressive will offset losses from the drop in Progressive'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 |
| Progressive vs. COSMOSTEEL HLDGS | Progressive vs. Tianjin Capital Environmental | Progressive vs. ELL ENVIRONHLDGS HD 0001 | Progressive vs. CITY OFFICE REIT |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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