Correlation Between QBE Insurance and CLOUDFLARE INC

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

Diversification Opportunities for QBE Insurance and CLOUDFLARE INC

0.0

Correlation Coefficient

QBE Insurance  CLOUDFLARE INC

Pay attention - limited upside

The 3 months correlation between QBE and CLOUDFLARE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and CLOUDFLARE INC A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLOUDFLARE INC A 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 CLOUDFLARE INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLOUDFLARE INC A has no effect on the direction of QBE Insurance i.e., QBE Insurance and CLOUDFLARE INC go up and down completely randomly.

Pair Corralation between QBE Insurance and CLOUDFLARE INC

If you would invest  1,117  in QBE Insurance Group on December 21, 2024 and sell it today you would earn a total of  103.00  from holding QBE Insurance Group or generate 9.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

QBE Insurance Group  vs.  CLOUDFLARE INC A

QBE Insurance Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, QBE Insurance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

CLOUDFLARE INC A

Risk-Adjusted Performance

Weak

Over the last 90 days CLOUDFLARE INC A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, CLOUDFLARE INC is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with QBE Insurance and CLOUDFLARE INC

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

The idea behind QBE Insurance Group and CLOUDFLARE INC A 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 Transaction History module to view history of all your transactions and understand their impact on performance.