Correlation Between Shoe Carnival and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Shoe Carnival and QBE Insurance 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 Shoe Carnival and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoe Carnival and QBE Insurance Group, you can compare the effects of market volatilities on Shoe Carnival and QBE Insurance 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 Shoe Carnival with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoe Carnival and QBE Insurance.
Diversification Opportunities for Shoe Carnival and QBE Insurance
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shoe and QBE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Shoe Carnival and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group and Shoe Carnival 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 Shoe Carnival are associated (or correlated) with QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of Shoe Carnival i.e., Shoe Carnival and QBE Insurance go up and down completely randomly.
Pair Corralation between Shoe Carnival and QBE Insurance
Given the investment horizon of 90 days Shoe Carnival is expected to generate 0.94 times more return on investment than QBE Insurance. However, Shoe Carnival is 1.07 times less risky than QBE Insurance. It trades about 0.07 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.04 per unit of risk. 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 |
Shoe Carnival vs. QBE Insurance Group
Performance |
| Timeline |
| Shoe Carnival |
| QBE Insurance Group |
Shoe Carnival and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoe Carnival and QBE Insurance
The main advantage of trading using opposite Shoe Carnival and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoe Carnival position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance's long position.| Shoe Carnival vs. Foot Locker | Shoe Carnival vs. Lands End | Shoe Carnival vs. Duluth Holdings | Shoe Carnival vs. Destination XL Group |
| QBE Insurance vs. Root Inc | QBE Insurance vs. Bank of America | QBE Insurance vs. Aerovate Therapeutics | QBE Insurance vs. SoundHound AI |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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