Correlation Between AVITA Medical and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both AVITA Medical and QBE Insurance 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 AVITA Medical and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AVITA Medical and QBE Insurance Group, you can compare the effects of market volatilities on AVITA Medical and QBE Insurance 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 AVITA Medical with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of AVITA Medical and QBE Insurance.
Diversification Opportunities for AVITA Medical and QBE Insurance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AVITA and QBE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding AVITA Medical and QBE Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on QBE Insurance Group and AVITA Medical 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 AVITA Medical are associated (or correlated) with QBE Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of QBE Insurance Group has no effect on the direction of AVITA Medical i.e., AVITA Medical and QBE Insurance go up and down completely randomly.
Pair Corralation between AVITA Medical and QBE Insurance
Assuming the 90 days trading horizon AVITA Medical is expected to generate 2.17 times more return on investment than QBE Insurance. However, AVITA Medical is 2.17 times more volatile than QBE Insurance Group. It trades about 0.03 of its potential returns per unit of risk. QBE Insurance Group is currently generating about -0.11 per unit of risk. If you would invest 228.00 in AVITA Medical on September 20, 2024 and sell it today you would earn a total of 2.00 from holding AVITA Medical or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AVITA Medical vs. QBE Insurance Group
Performance |
| Timeline |
| AVITA Medical |
| QBE Insurance Group |
AVITA Medical and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AVITA Medical and QBE Insurance
The main advantage of trading using opposite AVITA Medical and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AVITA Medical position performs unexpectedly, QBE Insurance 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 QBE Insurance will offset losses from the drop in QBE Insurance's long position.| AVITA Medical vs. MHP Hotel AG | AVITA Medical vs. Hyatt Hotels | AVITA Medical vs. DISTRICT METALS | AVITA Medical vs. Jacquet Metal Service |
| QBE Insurance vs. INTERCONT HOTELS | QBE Insurance vs. Highlight Communications AG | QBE Insurance vs. Spirent Communications plc | QBE Insurance vs. MELIA HOTELS |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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