Correlation Between QBE Insurance and Shoe Carnival
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Shoe Carnival 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 Shoe Carnival 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 Shoe Carnival, you can compare the effects of market volatilities on QBE Insurance and Shoe Carnival 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 Shoe Carnival. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Shoe Carnival.
Diversification Opportunities for QBE Insurance and Shoe Carnival
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QBE and Shoe is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Shoe Carnival in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoe Carnival 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 Shoe Carnival. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoe Carnival has no effect on the direction of QBE Insurance i.e., QBE Insurance and Shoe Carnival go up and down completely randomly.
Pair Corralation between QBE Insurance and Shoe Carnival
Assuming the 90 days horizon QBE Insurance is expected to generate 1.45 times less return on investment than Shoe Carnival. In addition to that, QBE Insurance is 1.07 times more volatile than Shoe Carnival. It trades about 0.04 of its total potential returns per unit of risk. Shoe Carnival is currently generating about 0.07 per unit of volatility. If you would invest 2,137 in Shoe Carnival on September 12, 2024 and sell it today you would earn a total of 1,432 from holding Shoe Carnival or generate 67.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 67.02% |
| Values | Daily Returns |
QBE Insurance Group vs. Shoe Carnival
Performance |
| Timeline |
| QBE Insurance Group |
| Shoe Carnival |
QBE Insurance and Shoe Carnival Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Shoe Carnival
The main advantage of trading using opposite QBE Insurance and Shoe Carnival positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Shoe Carnival 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 Shoe Carnival will offset losses from the drop in Shoe Carnival's long position.| QBE Insurance vs. Root Inc | QBE Insurance vs. Bank of America | QBE Insurance vs. Aerovate Therapeutics | QBE Insurance vs. SoundHound AI |
| Shoe Carnival vs. Foot Locker | Shoe Carnival vs. Lands End | Shoe Carnival vs. Duluth Holdings | Shoe Carnival vs. Destination XL Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |