Correlation Between QBE Insurance and Sporttotal
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Sporttotal 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 Sporttotal 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 Sporttotal AG, you can compare the effects of market volatilities on QBE Insurance and Sporttotal 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 Sporttotal. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Sporttotal.
Diversification Opportunities for QBE Insurance and Sporttotal
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QBE and Sporttotal is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Sporttotal AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sporttotal AG 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 Sporttotal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sporttotal AG has no effect on the direction of QBE Insurance i.e., QBE Insurance and Sporttotal go up and down completely randomly.
Pair Corralation between QBE Insurance and Sporttotal
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.37 times more return on investment than Sporttotal. However, QBE Insurance Group is 2.7 times less risky than Sporttotal. It trades about 0.38 of its potential returns per unit of risk. Sporttotal AG is currently generating about -0.21 per unit of risk. If you would invest 1,040 in QBE Insurance Group on August 30, 2024 and sell it today you would earn a total of 150.00 from holding QBE Insurance Group or generate 14.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Sporttotal AG
Performance |
| Timeline |
| QBE Insurance Group |
| Sporttotal AG |
QBE Insurance and Sporttotal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Sporttotal
The main advantage of trading using opposite QBE Insurance and Sporttotal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Sporttotal 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 Sporttotal will offset losses from the drop in Sporttotal's long position.| QBE Insurance vs. PICC Property and | QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. SIVERS SEMICONDUCTORS AB | QBE Insurance vs. Talanx AG |
| Sporttotal vs. Apple Inc | Sporttotal vs. Apple Inc | Sporttotal vs. Superior Plus Corp | Sporttotal vs. SIVERS SEMICONDUCTORS AB |
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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