Correlation Between Parkd and Qbe Insurance
Can any of the company-specific risk be diversified away by investing in both Parkd 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 Parkd and Qbe Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkd and Qbe Insurance Group, you can compare the effects of market volatilities on Parkd 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 Parkd with a short position of Qbe Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkd and Qbe Insurance.
Diversification Opportunities for Parkd and Qbe Insurance
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Parkd and Qbe is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Parkd 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 Parkd 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 Parkd 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 Parkd i.e., Parkd and Qbe Insurance go up and down completely randomly.
Pair Corralation between Parkd and Qbe Insurance
Assuming the 90 days trading horizon Parkd is expected to generate 4.88 times more return on investment than Qbe Insurance. However, Parkd is 4.88 times more volatile than Qbe Insurance Group. It trades about 0.07 of its potential returns per unit of risk. Qbe Insurance Group is currently generating about 0.07 per unit of risk. If you would invest 1.90 in Parkd on November 27, 2024 and sell it today you would earn a total of 3.60 from holding Parkd or generate 189.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parkd vs. Qbe Insurance Group
Performance |
| Timeline |
| Parkd |
| Qbe Insurance Group |
Parkd and Qbe Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkd and Qbe Insurance
The main advantage of trading using opposite Parkd and Qbe Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkd 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.| Parkd vs. Vitura Health Limited | Parkd vs. Austco Healthcare | Parkd vs. Oneview Healthcare PLC | Parkd vs. EVE Health Group |
| Qbe Insurance vs. Global Data Centre | Qbe Insurance vs. ACDC Metals | Qbe Insurance vs. Zeotech | Qbe Insurance vs. Ambertech |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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