Correlation Between Qbe Insurance and AMP
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and AMP 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 Qbe Insurance and AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qbe Insurance Group and AMP, you can compare the effects of market volatilities on Qbe Insurance and AMP 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 Qbe Insurance with a short position of AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and AMP.
Diversification Opportunities for Qbe Insurance and AMP
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qbe and AMP is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP and Qbe Insurance 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 Qbe Insurance Group are associated (or correlated) with AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and AMP go up and down completely randomly.
Pair Corralation between Qbe Insurance and AMP
Assuming the 90 days trading horizon Qbe Insurance is expected to generate 1.23 times less return on investment than AMP. But when comparing it to its historical volatility, Qbe Insurance Group is 2.04 times less risky than AMP. It trades about 0.21 of its potential returns per unit of risk. AMP is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 132.00 in AMP on September 12, 2024 and sell it today you would earn a total of 28.00 from holding AMP or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. AMP
Performance |
| Timeline |
| Qbe Insurance Group |
| AMP |
Qbe Insurance and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and AMP
The main advantage of trading using opposite Qbe Insurance and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Qbe Insurance vs. Prodigy Gold NL | Qbe Insurance vs. Enegex NL | Qbe Insurance vs. Pointsbet Holdings | Qbe Insurance vs. Indiana Resources |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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