Correlation Between Qbe Insurance and Recce

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

Diversification Opportunities for Qbe Insurance and Recce

-0.68

Correlation Coefficient

Qbe Insurance  Recce

Excellent diversification

The 3 months correlation between Qbe and Recce is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Recce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recce 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 Recce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recce has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Recce go up and down completely randomly.

Pair Corralation between Qbe Insurance and Recce

Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.33 times more return on investment than Recce. However, Qbe Insurance Group is 3.08 times less risky than Recce. It trades about 0.08 of its potential returns per unit of risk. Recce is currently generating about 0.0 per unit of risk. If you would invest  1,414  in Qbe Insurance Group on September 12, 2024 and sell it today you would earn a total of  543.00  from holding Qbe Insurance Group or generate 38.4% return on investment over 90 days.

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

Qbe Insurance Group  vs.  Recce

Qbe Insurance Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Qbe Insurance Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, Qbe Insurance unveiled solid returns over the last few months and may actually be approaching a breakup point.

Recce

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Recce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Recce is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Qbe Insurance and Recce

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

The idea behind Qbe Insurance Group and Recce 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.