Correlation Between LOWES and QBE Insurance
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By analyzing existing cross correlation between LOWES INC 6875 and QBE Insurance Group, you can compare the effects of market volatilities on LOWES 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 LOWES with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOWES and QBE Insurance.
Diversification Opportunities for LOWES and QBE Insurance
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LOWES and QBE is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding LOWES INC 6875 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 LOWES 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 LOWES INC 6875 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 LOWES i.e., LOWES and QBE Insurance go up and down completely randomly.
Pair Corralation between LOWES and QBE Insurance
Assuming the 90 days trading horizon LOWES INC 6875 is expected to under-perform the QBE Insurance. But the bond apears to be less risky and, when comparing its historical volatility, LOWES INC 6875 is 1.89 times less risky than QBE Insurance. The bond trades about -0.19 of its potential returns per unit of risk. The QBE Insurance Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,115 in QBE Insurance Group on September 4, 2024 and sell it today you would earn a total of 50.00 from holding QBE Insurance Group or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
LOWES INC 6875 vs. QBE Insurance Group
Performance |
| Timeline |
| LOWES INC 6875 |
| QBE Insurance Group |
LOWES and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOWES and QBE Insurance
The main advantage of trading using opposite LOWES and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOWES 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.| LOWES vs. Alaska Air Group | LOWES vs. Ryanair Holdings PLC | LOWES vs. Porvair plc | LOWES vs. Employers Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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