Correlation Between SIDETRADE and QBE Insurance

Can any of the company-specific risk be diversified away by investing in both SIDETRADE 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 SIDETRADE and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SIDETRADE EO 1 and QBE Insurance Group, you can compare the effects of market volatilities on SIDETRADE 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 SIDETRADE with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and QBE Insurance.

Diversification Opportunities for SIDETRADE and QBE Insurance

0.9

Correlation Coefficient

SIDETRADE  QBE Insurance

Almost no diversification

The 3 months correlation between SIDETRADE and QBE is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 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 SIDETRADE 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 SIDETRADE EO 1 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 SIDETRADE i.e., SIDETRADE and QBE Insurance go up and down completely randomly.

Pair Corralation between SIDETRADE and QBE Insurance

Assuming the 90 days horizon SIDETRADE EO 1 is expected to generate 1.9 times more return on investment than QBE Insurance. However, SIDETRADE is 1.9 times more volatile than QBE Insurance Group. It trades about 0.05 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  22,200  in SIDETRADE EO 1 on April 24, 2025 and sell it today you would earn a total of  1,100  from holding SIDETRADE EO 1 or generate 4.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SIDETRADE EO 1  vs.  QBE Insurance Group

SIDETRADE EO 1

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SIDETRADE EO 1 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SIDETRADE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

QBE Insurance Group

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, QBE Insurance is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SIDETRADE and QBE Insurance

The main advantage of trading using opposite SIDETRADE and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE 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.

The idea behind SIDETRADE EO 1 and QBE Insurance Group 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.