Correlation Between QBE Insurance and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Uber Technologies 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 Uber Technologies 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 Uber Technologies, you can compare the effects of market volatilities on QBE Insurance and Uber Technologies 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 Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Uber Technologies.
Diversification Opportunities for QBE Insurance and Uber Technologies
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between QBE and Uber is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies 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 Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of QBE Insurance i.e., QBE Insurance and Uber Technologies go up and down completely randomly.
Pair Corralation between QBE Insurance and Uber Technologies
Assuming the 90 days horizon QBE Insurance is expected to generate 1.8 times less return on investment than Uber Technologies. In addition to that, QBE Insurance is 1.31 times more volatile than Uber Technologies. It trades about 0.04 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.09 per unit of volatility. If you would invest 2,464 in Uber Technologies on September 12, 2024 and sell it today you would earn a total of 4,032 from holding Uber Technologies or generate 163.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 74.95% |
| Values | Daily Returns |
QBE Insurance Group vs. Uber Technologies
Performance |
| Timeline |
| QBE Insurance Group |
| Uber Technologies |
QBE Insurance and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Uber Technologies
The main advantage of trading using opposite QBE Insurance and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| QBE Insurance vs. Root Inc | QBE Insurance vs. Bank of America | QBE Insurance vs. Aerovate Therapeutics | QBE Insurance vs. SoundHound AI |
| Uber Technologies vs. Manhattan Associates | Uber Technologies vs. Paycom Soft | Uber Technologies vs. Clearwater Analytics Holdings | Uber Technologies vs. Procore Technologies |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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