Correlation Between PUBLIC STORAGE and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both PUBLIC STORAGE 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 PUBLIC STORAGE and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUBLIC STORAGE PRFO and QBE Insurance Group, you can compare the effects of market volatilities on PUBLIC STORAGE 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 PUBLIC STORAGE with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUBLIC STORAGE and QBE Insurance.
Diversification Opportunities for PUBLIC STORAGE and QBE Insurance
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PUBLIC and QBE is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding PUBLIC STORAGE PRFO 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 PUBLIC STORAGE 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 PUBLIC STORAGE PRFO 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 PUBLIC STORAGE i.e., PUBLIC STORAGE and QBE Insurance go up and down completely randomly.
Pair Corralation between PUBLIC STORAGE and QBE Insurance
Assuming the 90 days trading horizon PUBLIC STORAGE is expected to generate 4.17 times less return on investment than QBE Insurance. But when comparing it to its historical volatility, PUBLIC STORAGE PRFO is 1.28 times less risky than QBE Insurance. It trades about 0.08 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 975.00 in QBE Insurance Group on September 3, 2024 and sell it today you would earn a total of 245.00 from holding QBE Insurance Group or generate 25.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PUBLIC STORAGE PRFO vs. QBE Insurance Group
Performance |
| Timeline |
| PUBLIC STORAGE PRFO |
| QBE Insurance Group |
PUBLIC STORAGE and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUBLIC STORAGE and QBE Insurance
The main advantage of trading using opposite PUBLIC STORAGE and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUBLIC STORAGE 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.| PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Superior Plus Corp |
| QBE Insurance vs. INFORMATION SVC GRP | QBE Insurance vs. Fidelity National Information | QBE Insurance vs. PUBLIC STORAGE PRFO | QBE Insurance vs. DOCDATA |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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