Correlation Between Lendlease and Qbe Insurance
Can any of the company-specific risk be diversified away by investing in both Lendlease 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 Lendlease and Qbe Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lendlease Group and Qbe Insurance Group, you can compare the effects of market volatilities on Lendlease 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 Lendlease with a short position of Qbe Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease and Qbe Insurance.
Diversification Opportunities for Lendlease and Qbe Insurance
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lendlease and Qbe is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease 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 Lendlease 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 Lendlease 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 Lendlease i.e., Lendlease and Qbe Insurance go up and down completely randomly.
Pair Corralation between Lendlease and Qbe Insurance
Assuming the 90 days trading horizon Lendlease Group is expected to under-perform the Qbe Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Lendlease Group is 1.38 times less risky than Qbe Insurance. The stock trades about -0.06 of its potential returns per unit of risk. The Qbe Insurance Group is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 1,721 in Qbe Insurance Group on August 27, 2024 and sell it today you would earn a total of 257.00 from holding Qbe Insurance Group or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lendlease Group vs. Qbe Insurance Group
Performance |
| Timeline |
| Lendlease Group |
| Qbe Insurance Group |
Lendlease and Qbe Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lendlease and Qbe Insurance
The main advantage of trading using opposite Lendlease and Qbe Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease 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.| Lendlease vs. Scentre Group | Lendlease vs. Vicinity Centres Re | Lendlease vs. Charter Hall Retail | Lendlease vs. Cromwell Property Group |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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