Correlation Between Platinum Asset and Qbe Insurance
Can any of the company-specific risk be diversified away by investing in both Platinum Asset 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 Platinum Asset and Qbe Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asset Management and Qbe Insurance Group, you can compare the effects of market volatilities on Platinum Asset 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 Platinum Asset with a short position of Qbe Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asset and Qbe Insurance.
Diversification Opportunities for Platinum Asset and Qbe Insurance
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Platinum and Qbe is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asset Management 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 Platinum Asset 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 Platinum Asset Management 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 Platinum Asset i.e., Platinum Asset and Qbe Insurance go up and down completely randomly.
Pair Corralation between Platinum Asset and Qbe Insurance
Assuming the 90 days trading horizon Platinum Asset Management is expected to generate 2.27 times more return on investment than Qbe Insurance. However, Platinum Asset is 2.27 times more volatile than Qbe Insurance Group. It trades about 0.04 of its potential returns per unit of risk. Qbe Insurance Group is currently generating about 0.08 per unit of risk. If you would invest 94.00 in Platinum Asset Management on August 27, 2024 and sell it today you would earn a total of 12.00 from holding Platinum Asset Management or generate 12.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asset Management vs. Qbe Insurance Group
Performance |
| Timeline |
| Platinum Asset Management |
| Qbe Insurance Group |
Platinum Asset and Qbe Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asset and Qbe Insurance
The main advantage of trading using opposite Platinum Asset and Qbe Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asset 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.| Platinum Asset vs. National Australia Bank | Platinum Asset vs. National Australia Bank | Platinum Asset vs. Westpac Banking | Platinum Asset vs. National Australia Bank |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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