Correlation Between Qbe Insurance and Zip Co
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Zip Co 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 Zip Co 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 Zip Co Limited, you can compare the effects of market volatilities on Qbe Insurance and Zip Co 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 Zip Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Zip Co.
Diversification Opportunities for Qbe Insurance and Zip Co
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Qbe and Zip is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Zip Co Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zip Co Limited 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 Zip Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zip Co Limited has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Zip Co go up and down completely randomly.
Pair Corralation between Qbe Insurance and Zip Co
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.26 times more return on investment than Zip Co. However, Qbe Insurance Group is 3.84 times less risky than Zip Co. It trades about 0.21 of its potential returns per unit of risk. Zip Co Limited is currently generating about -0.13 per unit of risk. If you would invest 1,890 in Qbe Insurance Group on December 27, 2024 and sell it today you would earn a total of 319.00 from holding Qbe Insurance Group or generate 16.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Qbe Insurance Group vs. Zip Co Limited
Performance |
Timeline |
Qbe Insurance Group |
Zip Co Limited |
Qbe Insurance and Zip Co Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Qbe Insurance and Zip Co
The main advantage of trading using opposite Qbe Insurance and Zip Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Zip Co 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 Zip Co will offset losses from the drop in Zip Co's long position.Qbe Insurance vs. IDP Education | Qbe Insurance vs. Macquarie Bank Limited | Qbe Insurance vs. Aeon Metals | Qbe Insurance vs. Finexia Financial Group |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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