Correlation Between Hanison Construction and QBE Insurance

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

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

Diversification Opportunities for Hanison Construction and QBE Insurance

0.0

Correlation Coefficient

Hanison Construction  QBE Insurance

Pay attention - limited upside

The 3 months correlation between Hanison and QBE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hanison Construction Holdings 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 Hanison Construction 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 Hanison Construction Holdings 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 Hanison Construction i.e., Hanison Construction and QBE Insurance go up and down completely randomly.

Pair Corralation between Hanison Construction and QBE Insurance

If you would invest  1,020  in QBE Insurance Group on September 23, 2024 and sell it today you would earn a total of  120.00  from holding QBE Insurance Group or generate 11.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Hanison Construction Holdings  vs.  QBE Insurance Group

Hanison Construction

Risk-Adjusted Performance

0 of 100

Very Weak

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

QBE Insurance Group

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QBE Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hanison Construction and QBE Insurance

The main advantage of trading using opposite Hanison Construction and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanison Construction 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 Hanison Construction Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.