Correlation Between QBE Insurance and Playtika Holding

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

Diversification Opportunities for QBE Insurance and Playtika Holding

0.59

Correlation Coefficient

QBE Insurance  Playtika Holding

Very weak diversification

The 3 months correlation between QBE and Playtika is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Playtika Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Playtika Holding Corp 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 Playtika Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Playtika Holding Corp has no effect on the direction of QBE Insurance i.e., QBE Insurance and Playtika Holding go up and down completely randomly.

Pair Corralation between QBE Insurance and Playtika Holding

Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.94 times more return on investment than Playtika Holding. However, QBE Insurance Group is 1.06 times less risky than Playtika Holding. It trades about 0.06 of its potential returns per unit of risk. Playtika Holding Corp is currently generating about -0.01 per unit of risk. If you would invest  950.00  in QBE Insurance Group on September 19, 2024 and sell it today you would earn a total of  240.00  from holding QBE Insurance Group or generate 25.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	75.86%
Values	Daily Returns

QBE Insurance Group  vs.  Playtika Holding Corp

QBE Insurance Group

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak forward indicators, QBE Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Playtika Holding Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Playtika Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with QBE Insurance and Playtika Holding

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

The idea behind QBE Insurance Group and Playtika Holding Corp 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.