Correlation Between Hawkins and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Hawkins 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 Hawkins and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hawkins and QBE Insurance Group, you can compare the effects of market volatilities on Hawkins 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 Hawkins with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hawkins and QBE Insurance.
Diversification Opportunities for Hawkins and QBE Insurance
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hawkins and QBE is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Hawkins 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 Hawkins 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 Hawkins 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 Hawkins i.e., Hawkins and QBE Insurance go up and down completely randomly.
Pair Corralation between Hawkins and QBE Insurance
Given the investment horizon of 90 days Hawkins is expected to generate 2.69 times more return on investment than QBE Insurance. However, Hawkins is 2.69 times more volatile than QBE Insurance Group. It trades about 0.43 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.22 per unit of risk. If you would invest 10,675 in Hawkins on September 1, 2024 and sell it today you would earn a total of 2,776 from holding Hawkins or generate 26.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hawkins vs. QBE Insurance Group
Performance |
| Timeline |
| Hawkins |
| QBE Insurance Group |
Hawkins and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hawkins and QBE Insurance
The main advantage of trading using opposite Hawkins and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hawkins 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.| Hawkins vs. H B Fuller | Hawkins vs. Minerals Technologies | Hawkins vs. Quaker Chemical | Hawkins vs. Oil Dri |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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