Correlation Between Bisalloy Steel and Qbe Insurance
Can any of the company-specific risk be diversified away by investing in both Bisalloy Steel 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 Bisalloy Steel and Qbe Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bisalloy Steel Group and Qbe Insurance Group, you can compare the effects of market volatilities on Bisalloy Steel 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 Bisalloy Steel with a short position of Qbe Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bisalloy Steel and Qbe Insurance.
Diversification Opportunities for Bisalloy Steel and Qbe Insurance
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bisalloy and Qbe is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Bisalloy Steel Group 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 Bisalloy Steel 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 Bisalloy Steel Group 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 Bisalloy Steel i.e., Bisalloy Steel and Qbe Insurance go up and down completely randomly.
Pair Corralation between Bisalloy Steel and Qbe Insurance
Assuming the 90 days trading horizon Bisalloy Steel Group is expected to generate 2.42 times more return on investment than Qbe Insurance. However, Bisalloy Steel is 2.42 times more volatile than Qbe Insurance Group. It trades about 0.12 of its potential returns per unit of risk. Qbe Insurance Group is currently generating about -0.12 per unit of risk. If you would invest 396.00 in Bisalloy Steel Group on September 20, 2024 and sell it today you would earn a total of 29.00 from holding Bisalloy Steel Group or generate 7.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bisalloy Steel Group vs. Qbe Insurance Group
Performance |
| Timeline |
| Bisalloy Steel Group |
| Qbe Insurance Group |
Bisalloy Steel and Qbe Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bisalloy Steel and Qbe Insurance
The main advantage of trading using opposite Bisalloy Steel and Qbe Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bisalloy Steel 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.| Bisalloy Steel vs. Northern Star Resources | Bisalloy Steel vs. Bluescope Steel | Bisalloy Steel vs. Sandfire Resources NL | Bisalloy Steel vs. De Grey Mining |
| Qbe Insurance vs. Phoslock Environmental Technologies | Qbe Insurance vs. Bisalloy Steel Group | Qbe Insurance vs. Prime Financial Group | Qbe Insurance vs. Bell Financial Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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