Correlation Between QBE Insurance and ENVVENO MEDICAL

Can any of the company-specific risk be diversified away by investing in both QBE Insurance and ENVVENO MEDICAL 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 ENVVENO MEDICAL 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 ENVVENO MEDICAL DL 00001, you can compare the effects of market volatilities on QBE Insurance and ENVVENO MEDICAL 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 ENVVENO MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and ENVVENO MEDICAL.

Diversification Opportunities for QBE Insurance and ENVVENO MEDICAL

0.38

Correlation Coefficient

QBE Insurance  ENVVENO MEDICAL

Weak diversification

The 3 months correlation between QBE and ENVVENO is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and ENVVENO MEDICAL DL 00001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENVVENO MEDICAL DL 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 ENVVENO MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENVVENO MEDICAL DL has no effect on the direction of QBE Insurance i.e., QBE Insurance and ENVVENO MEDICAL go up and down completely randomly.

Pair Corralation between QBE Insurance and ENVVENO MEDICAL

Assuming the 90 days horizon QBE Insurance is expected to generate 1.46 times less return on investment than ENVVENO MEDICAL. But when comparing it to its historical volatility, QBE Insurance Group is 3.11 times less risky than ENVVENO MEDICAL. It trades about 0.08 of its potential returns per unit of risk. ENVVENO MEDICAL DL 00001 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  244.00  in ENVVENO MEDICAL DL 00001 on December 19, 2024 and sell it today you would earn a total of  12.00  from holding ENVVENO MEDICAL DL 00001 or generate 4.92% return on investment over 90 days.

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

QBE Insurance Group  vs.  ENVVENO MEDICAL DL 00001

QBE Insurance Group

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, QBE Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ENVVENO MEDICAL DL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ENVVENO MEDICAL DL 00001 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ENVVENO MEDICAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with QBE Insurance and ENVVENO MEDICAL

The main advantage of trading using opposite QBE Insurance and ENVVENO MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, ENVVENO MEDICAL 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 ENVVENO MEDICAL will offset losses from the drop in ENVVENO MEDICAL's long position.

The idea behind QBE Insurance Group and ENVVENO MEDICAL DL 00001 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 CEOs Directory module to screen CEOs from public companies around the world.