Correlation Between QBE Insurance and Lifevantage
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on QBE Insurance and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Lifevantage.
Diversification Opportunities for QBE Insurance and Lifevantage
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and Lifevantage is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of QBE Insurance i.e., QBE Insurance and Lifevantage go up and down completely randomly.
Pair Corralation between QBE Insurance and Lifevantage
Assuming the 90 days horizon QBE Insurance is expected to generate 2.85 times less return on investment than Lifevantage. But when comparing it to its historical volatility, QBE Insurance Group is 3.39 times less risky than Lifevantage. It trades about 0.22 of its potential returns per unit of risk. Lifevantage is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,300 in Lifevantage on September 2, 2024 and sell it today you would earn a total of 161.00 from holding Lifevantage or generate 12.38% 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. Lifevantage
Performance |
| Timeline |
| QBE Insurance Group |
| Lifevantage |
QBE Insurance and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Lifevantage
The main advantage of trading using opposite QBE Insurance and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.The idea behind QBE Insurance Group and Lifevantage 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.| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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