Correlation Between QBE Insurance and ENN Energy
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and ENN Energy 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 ENN Energy 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 ENN Energy Holdings, you can compare the effects of market volatilities on QBE Insurance and ENN Energy 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 ENN Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and ENN Energy.
Diversification Opportunities for QBE Insurance and ENN Energy
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and ENN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and ENN Energy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENN Energy Holdings 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 ENN Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENN Energy Holdings has no effect on the direction of QBE Insurance i.e., QBE Insurance and ENN Energy go up and down completely randomly.
Pair Corralation between QBE Insurance and ENN Energy
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.6 times more return on investment than ENN Energy. However, QBE Insurance Group is 1.68 times less risky than ENN Energy. It trades about 0.59 of its potential returns per unit of risk. ENN Energy Holdings is currently generating about -0.03 per unit of risk. If you would invest 1,020 in QBE Insurance Group on September 4, 2024 and sell it today you would earn a total of 200.00 from holding QBE Insurance Group or generate 19.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. ENN Energy Holdings
Performance |
| Timeline |
| QBE Insurance Group |
| ENN Energy Holdings |
QBE Insurance and ENN Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and ENN Energy
The main advantage of trading using opposite QBE Insurance and ENN Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, ENN Energy 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 ENN Energy will offset losses from the drop in ENN Energy's long position.| QBE Insurance vs. Hitachi Construction Machinery | QBE Insurance vs. INDOFOOD AGRI RES | QBE Insurance vs. Lery Seafood Group | QBE Insurance vs. HF FOODS GRP |
| ENN Energy vs. PT Bank Maybank | ENN Energy vs. QBE Insurance Group | ENN Energy vs. The Hanover Insurance | ENN Energy vs. Meiko Electronics Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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