Correlation Between CTT Correios and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both CTT Correios 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 CTT Correios and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CTT Correios and QBE Insurance Group, you can compare the effects of market volatilities on CTT Correios 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 CTT Correios with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of CTT Correios and QBE Insurance.
Diversification Opportunities for CTT Correios and QBE Insurance
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CTT and QBE is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CTT Correios 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 CTT Correios 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 CTT Correios 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 CTT Correios i.e., CTT Correios and QBE Insurance go up and down completely randomly.
Pair Corralation between CTT Correios and QBE Insurance
Assuming the 90 days horizon CTT Correios is expected to generate 1.92 times more return on investment than QBE Insurance. However, CTT Correios is 1.92 times more volatile than QBE Insurance Group. It trades about 0.32 of its potential returns per unit of risk. QBE Insurance Group is currently generating about -0.01 per unit of risk. If you would invest 443.00 in CTT Correios on October 30, 2024 and sell it today you would earn a total of 142.00 from holding CTT Correios or generate 32.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CTT Correios vs. QBE Insurance Group
Performance |
| Timeline |
| CTT Correios |
| QBE Insurance Group |
CTT Correios and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CTT Correios and QBE Insurance
The main advantage of trading using opposite CTT Correios and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CTT Correios 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.| CTT Correios vs. Nok Airlines PCL | CTT Correios vs. Gol Intelligent Airlines | CTT Correios vs. AEGEAN AIRLINES | CTT Correios vs. SINGAPORE AIRLINES |
| QBE Insurance vs. STGEORGE MINING LTD | QBE Insurance vs. Monument Mining Limited | QBE Insurance vs. CLEAN ENERGY FUELS | QBE Insurance vs. Carnegie Clean Energy |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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