Correlation Between QBE Insurance and Hyster Yale

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

Diversification Opportunities for QBE Insurance and Hyster Yale

-0.62

Correlation Coefficient

QBE Insurance  Hyster Yale

Excellent diversification

The 3 months correlation between QBE and Hyster is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Hyster Yale Materials Handling in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyster Yale Materials 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 Hyster Yale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyster Yale Materials has no effect on the direction of QBE Insurance i.e., QBE Insurance and Hyster Yale go up and down completely randomly.

Pair Corralation between QBE Insurance and Hyster Yale

Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.67 times more return on investment than Hyster Yale. However, QBE Insurance Group is 1.5 times less risky than Hyster Yale. It trades about -0.24 of its potential returns per unit of risk. Hyster Yale Materials Handling is currently generating about -0.23 per unit of risk. If you would invest  1,220  in QBE Insurance Group on September 29, 2024 and sell it today you would lose (70.00) from holding QBE Insurance Group or give up 5.74% of portfolio value over 90 days.

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

QBE Insurance Group  vs.  Hyster Yale Materials Handling

QBE Insurance Group

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, QBE Insurance reported solid returns over the last few months and may actually be approaching a breakup point.

Hyster Yale Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyster Yale Materials Handling has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with QBE Insurance and Hyster Yale

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

The idea behind QBE Insurance Group and Hyster Yale Materials Handling 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.