Correlation Between QBE Insurance and Ainos

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

Diversification Opportunities for QBE Insurance and Ainos

-0.37

Correlation Coefficient

QBE Insurance  Ainos

Very good diversification

The 3 months correlation between QBE and Ainos is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Ainos Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ainos Inc 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 Ainos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ainos Inc has no effect on the direction of QBE Insurance i.e., QBE Insurance and Ainos go up and down completely randomly.

Pair Corralation between QBE Insurance and Ainos

Assuming the 90 days horizon QBE Insurance is expected to generate 2253.32 times less return on investment than Ainos. But when comparing it to its historical volatility, QBE Insurance Group is 131.14 times less risky than Ainos. It trades about 0.02 of its potential returns per unit of risk. Ainos Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  7.00  in Ainos Inc on September 23, 2024 and sell it today you would lose (4.08) from holding Ainos Inc or give up 58.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	22.83%
Values	Daily Returns

QBE Insurance Group  vs.  Ainos Inc

QBE Insurance Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward indicators, QBE Insurance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Ainos Inc

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Ainos Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly fragile fundamental indicators, Ainos showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QBE Insurance and Ainos

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

The idea behind QBE Insurance Group and Ainos Inc 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.