Correlation Between QBE Insurance and United Rentals
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and United Rentals 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 United Rentals 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 United Rentals, you can compare the effects of market volatilities on QBE Insurance and United Rentals 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 United Rentals. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and United Rentals.
Diversification Opportunities for QBE Insurance and United Rentals
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between QBE and United is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and United Rentals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Rentals 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 United Rentals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Rentals has no effect on the direction of QBE Insurance i.e., QBE Insurance and United Rentals go up and down completely randomly.
Pair Corralation between QBE Insurance and United Rentals
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.53 times more return on investment than United Rentals. However, QBE Insurance Group is 1.89 times less risky than United Rentals. It trades about 0.21 of its potential returns per unit of risk. United Rentals is currently generating about -0.07 per unit of risk. If you would invest 1,010 in QBE Insurance Group on October 10, 2024 and sell it today you would earn a total of 180.00 from holding QBE Insurance Group or generate 17.82% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.33% |
Values | Daily Returns |
QBE Insurance Group vs. United Rentals
Performance |
Timeline |
QBE Insurance Group |
United Rentals |
QBE Insurance and United Rentals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with QBE Insurance and United Rentals
The main advantage of trading using opposite QBE Insurance and United Rentals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, United Rentals 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 United Rentals will offset losses from the drop in United Rentals' long position.QBE Insurance vs. PICC Property and | QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. SIVERS SEMICONDUCTORS AB |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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