Correlation Between QBE Insurance and National Vision
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and National Vision 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 National Vision 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 National Vision Holdings, you can compare the effects of market volatilities on QBE Insurance and National Vision 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 National Vision. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and National Vision.
Diversification Opportunities for QBE Insurance and National Vision
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and National is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and National Vision Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Vision 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 National Vision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Vision Holdings has no effect on the direction of QBE Insurance i.e., QBE Insurance and National Vision go up and down completely randomly.
Pair Corralation between QBE Insurance and National Vision
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.65 times more return on investment than National Vision. However, QBE Insurance Group is 1.53 times less risky than National Vision. It trades about 0.07 of its potential returns per unit of risk. National Vision Holdings is currently generating about -0.05 per unit of risk. If you would invest 909.00 in QBE Insurance Group on September 4, 2024 and sell it today you would earn a total of 256.00 from holding QBE Insurance Group or generate 28.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
QBE Insurance Group vs. National Vision Holdings
Performance |
| Timeline |
| QBE Insurance Group |
| National Vision Holdings |
QBE Insurance and National Vision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and National Vision
The main advantage of trading using opposite QBE Insurance and National Vision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, National Vision 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 National Vision will offset losses from the drop in National Vision's long position.The idea behind QBE Insurance Group and National Vision Holdings 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.| National Vision vs. Alcon AG | National Vision vs. The Cooper Companies, | National Vision vs. AngioDynamics | National Vision vs. AptarGroup |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |