Correlation Between SBI Insurance and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both SBI Insurance 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 SBI Insurance and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and QBE Insurance Group, you can compare the effects of market volatilities on SBI Insurance 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 SBI Insurance with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and QBE Insurance.
Diversification Opportunities for SBI Insurance and QBE Insurance
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SBI and QBE is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance 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 SBI Insurance 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 SBI Insurance 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 SBI Insurance i.e., SBI Insurance and QBE Insurance go up and down completely randomly.
Pair Corralation between SBI Insurance and QBE Insurance
Assuming the 90 days trading horizon SBI Insurance is expected to generate 1.89 times less return on investment than QBE Insurance. But when comparing it to its historical volatility, SBI Insurance Group is 1.05 times less risky than QBE Insurance. It trades about 0.1 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,160 in QBE Insurance Group on November 1, 2024 and sell it today you would earn a total of 50.00 from holding QBE Insurance Group or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SBI Insurance Group vs. QBE Insurance Group
Performance |
| Timeline |
| SBI Insurance Group |
| QBE Insurance Group |
SBI Insurance and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and QBE Insurance
The main advantage of trading using opposite SBI Insurance and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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.| SBI Insurance vs. alstria office REIT AG | SBI Insurance vs. COSMOSTEEL HLDGS | SBI Insurance vs. MOUNT GIBSON IRON | SBI Insurance vs. Khiron Life Sciences |
| QBE Insurance vs. PLAYSTUDIOS A DL 0001 | QBE Insurance vs. TOREX SEMICONDUCTOR LTD | QBE Insurance vs. RYU Apparel | QBE Insurance vs. Semiconductor Manufacturing International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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