Correlation Between Auswide Bank and Qbe Insurance
Can any of the company-specific risk be diversified away by investing in both Auswide Bank 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 Auswide Bank and Qbe Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Auswide Bank and Qbe Insurance Group, you can compare the effects of market volatilities on Auswide Bank 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 Auswide Bank with a short position of Qbe Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Auswide Bank and Qbe Insurance.
Diversification Opportunities for Auswide Bank and Qbe Insurance
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Auswide and Qbe is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Auswide Bank 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 Auswide Bank 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 Auswide Bank 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 Auswide Bank i.e., Auswide Bank and Qbe Insurance go up and down completely randomly.
Pair Corralation between Auswide Bank and Qbe Insurance
Assuming the 90 days trading horizon Auswide Bank is expected to generate 3.82 times less return on investment than Qbe Insurance. In addition to that, Auswide Bank is 1.3 times more volatile than Qbe Insurance Group. It trades about 0.02 of its total potential returns per unit of risk. Qbe Insurance Group is currently generating about 0.08 per unit of volatility. If you would invest 1,656 in Qbe Insurance Group on August 27, 2024 and sell it today you would earn a total of 322.00 from holding Qbe Insurance Group or generate 19.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Auswide Bank vs. Qbe Insurance Group
Performance |
| Timeline |
| Auswide Bank |
| Qbe Insurance Group |
Auswide Bank and Qbe Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Auswide Bank and Qbe Insurance
The main advantage of trading using opposite Auswide Bank and Qbe Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Auswide Bank 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.| Auswide Bank vs. Aneka Tambang Tbk | Auswide Bank vs. BHP Group Limited | Auswide Bank vs. Commonwealth Bank of | Auswide Bank vs. Commonwealth Bank of |
| Qbe Insurance vs. Nine Entertainment Co | Qbe Insurance vs. Beston Global Food | Qbe Insurance vs. oOhMedia | Qbe Insurance vs. Aurelia Metals |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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