Correlation Between QBE Insurance and Elmos Semiconductor
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Elmos Semiconductor 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 Elmos Semiconductor 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 Elmos Semiconductor SE, you can compare the effects of market volatilities on QBE Insurance and Elmos Semiconductor 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 Elmos Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Elmos Semiconductor.
Diversification Opportunities for QBE Insurance and Elmos Semiconductor
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QBE and Elmos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of QBE Insurance i.e., QBE Insurance and Elmos Semiconductor go up and down completely randomly.
Pair Corralation between QBE Insurance and Elmos Semiconductor
Assuming the 90 days horizon QBE Insurance is expected to generate 2.09 times less return on investment than Elmos Semiconductor. But when comparing it to its historical volatility, QBE Insurance Group is 2.08 times less risky than Elmos Semiconductor. It trades about 0.05 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,624 in Elmos Semiconductor SE on August 29, 2024 and sell it today you would earn a total of 6,299 from holding Elmos Semiconductor SE or generate 240.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 75.15% |
| Values | Daily Returns |
QBE Insurance Group vs. Elmos Semiconductor SE
Performance |
| Timeline |
| QBE Insurance Group |
| Elmos Semiconductor |
QBE Insurance and Elmos Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Elmos Semiconductor
The main advantage of trading using opposite QBE Insurance and Elmos Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Elmos Semiconductor 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 Elmos Semiconductor will offset losses from the drop in Elmos Semiconductor's long position.The idea behind QBE Insurance Group and Elmos Semiconductor SE pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Elmos Semiconductor vs. Legacy Education | Elmos Semiconductor vs. NVIDIA | Elmos Semiconductor vs. Apple Inc | Elmos Semiconductor vs. Microsoft |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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