Correlation Between SWISS WATER and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and QBE Insurance Group, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and QBE Insurance.
Diversification Opportunities for SWISS WATER and QBE Insurance
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between SWISS and QBE is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE 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 SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and QBE Insurance go up and down completely randomly.
Pair Corralation between SWISS WATER and QBE Insurance
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the QBE Insurance. In addition to that, SWISS WATER is 2.43 times more volatile than QBE Insurance Group. It trades about -0.09 of its total potential returns per unit of risk. QBE Insurance Group is currently generating about 0.19 per unit of volatility. If you would invest 1,130 in QBE Insurance Group on October 19, 2024 and sell it today you would earn a total of 40.00 from holding QBE Insurance Group or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. QBE Insurance Group
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| QBE Insurance Group |
SWISS WATER and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and QBE Insurance
The main advantage of trading using opposite SWISS WATER and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. COSTCO WHOLESALE CDR | SWISS WATER vs. Apollo Investment Corp | SWISS WATER vs. HK Electric Investments | SWISS WATER vs. Caseys General Stores |
| QBE Insurance vs. SWISS WATER DECAFFCOFFEE | QBE Insurance vs. BROADWIND ENRGY | QBE Insurance vs. Broadridge Financial Solutions | QBE Insurance vs. Gaztransport Technigaz SA |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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