Correlation Between Macquarie Group and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Macquarie Group 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 Macquarie Group and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macquarie Group Ltd and QBE Insurance Group, you can compare the effects of market volatilities on Macquarie Group 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 Macquarie Group with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macquarie Group and QBE Insurance.
Diversification Opportunities for Macquarie Group and QBE Insurance
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Macquarie and QBE is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Group Ltd 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 Macquarie Group 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 Macquarie Group Ltd 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 Macquarie Group i.e., Macquarie Group and QBE Insurance go up and down completely randomly.
Pair Corralation between Macquarie Group and QBE Insurance
Assuming the 90 days horizon Macquarie Group Ltd is expected to under-perform the QBE Insurance. But the pink sheet apears to be less risky and, when comparing its historical volatility, Macquarie Group Ltd is 1.41 times less risky than QBE Insurance. The pink sheet trades about -0.02 of its potential returns per unit of risk. The QBE Insurance Group is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,147 in QBE Insurance Group on August 28, 2024 and sell it today you would earn a total of 142.00 from holding QBE Insurance Group or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macquarie Group Ltd vs. QBE Insurance Group
Performance |
| Timeline |
| Macquarie Group |
| QBE Insurance Group |
Macquarie Group and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macquarie Group and QBE Insurance
The main advantage of trading using opposite Macquarie Group and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Group 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.| Macquarie Group vs. Evercore Partners | Macquarie Group vs. PJT Partners | Macquarie Group vs. Lazard | Macquarie Group vs. Perella Weinberg Partners |
| QBE Insurance vs. Heritage Insurance Hldgs | QBE Insurance vs. Universal Insurance Holdings | QBE Insurance vs. Kingstone Companies | QBE Insurance vs. HCI 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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