Correlation Between Qbe Insurance and Computershare
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Computershare 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 Computershare 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 Computershare, you can compare the effects of market volatilities on Qbe Insurance and Computershare 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 Computershare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Computershare.
Diversification Opportunities for Qbe Insurance and Computershare
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Qbe and Computershare is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Computershare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computershare 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 Computershare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computershare has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Computershare go up and down completely randomly.
Pair Corralation between Qbe Insurance and Computershare
Assuming the 90 days trading horizon Qbe Insurance is expected to generate 1.72 times less return on investment than Computershare. But when comparing it to its historical volatility, Qbe Insurance Group is 1.04 times less risky than Computershare. It trades about 0.2 of its potential returns per unit of risk. Computershare is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 2,511 in Computershare on September 26, 2024 and sell it today you would earn a total of 872.00 from holding Computershare or generate 34.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Qbe Insurance Group vs. Computershare
Performance |
Timeline |
Qbe Insurance Group |
Computershare |
Qbe Insurance and Computershare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qbe Insurance and Computershare
The main advantage of trading using opposite Qbe Insurance and Computershare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Computershare 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 Computershare will offset losses from the drop in Computershare's long position.Qbe Insurance vs. PVW Resources | Qbe Insurance vs. Woolworths | Qbe Insurance vs. Wesfarmers | Qbe Insurance vs. Coles Group |
Computershare vs. Greenvale Energy | Computershare vs. Ecofibre | Computershare vs. iShares Global Healthcare | Computershare vs. Adriatic Metals Plc |
Check out your portfolio center.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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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