Correlation Between QBE Insurance and SOGECLAIR
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and SOGECLAIR 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 SOGECLAIR 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 SOGECLAIR SA INH, you can compare the effects of market volatilities on QBE Insurance and SOGECLAIR 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 SOGECLAIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and SOGECLAIR.
Diversification Opportunities for QBE Insurance and SOGECLAIR
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between QBE and SOGECLAIR is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and SOGECLAIR SA INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOGECLAIR SA INH 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 SOGECLAIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOGECLAIR SA INH has no effect on the direction of QBE Insurance i.e., QBE Insurance and SOGECLAIR go up and down completely randomly.
Pair Corralation between QBE Insurance and SOGECLAIR
Assuming the 90 days horizon QBE Insurance is expected to generate 1.44 times less return on investment than SOGECLAIR. But when comparing it to its historical volatility, QBE Insurance Group is 2.42 times less risky than SOGECLAIR. It trades about 0.24 of its potential returns per unit of risk. SOGECLAIR SA INH is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,700 in SOGECLAIR SA INH on October 6, 2024 and sell it today you would earn a total of 330.00 from holding SOGECLAIR SA INH or generate 19.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
QBE Insurance Group vs. SOGECLAIR SA INH
Performance |
Timeline |
QBE Insurance Group |
SOGECLAIR SA INH |
QBE Insurance and SOGECLAIR Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with QBE Insurance and SOGECLAIR
The main advantage of trading using opposite QBE Insurance and SOGECLAIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, SOGECLAIR 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 SOGECLAIR will offset losses from the drop in SOGECLAIR's long position.QBE Insurance vs. Insurance Australia Group | QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. Origin Agritech |
SOGECLAIR vs. UNITED UTILITIES GR | SOGECLAIR vs. FAIR ISAAC | SOGECLAIR vs. Pentair plc | SOGECLAIR vs. AWILCO DRILLING 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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