Correlation Between Qbe Insurance and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Australian Unity 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 Australian Unity 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 Australian Unity Office, you can compare the effects of market volatilities on Qbe Insurance and Australian Unity 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 Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Australian Unity.
Diversification Opportunities for Qbe Insurance and Australian Unity
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Qbe and Australian is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Australian Unity Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity Office 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 Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity Office has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Australian Unity go up and down completely randomly.
Pair Corralation between Qbe Insurance and Australian Unity
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 1.29 times more return on investment than Australian Unity. However, Qbe Insurance is 1.29 times more volatile than Australian Unity Office. It trades about 0.46 of its potential returns per unit of risk. Australian Unity Office is currently generating about -0.2 per unit of risk. If you would invest 1,708 in Qbe Insurance Group on September 2, 2024 and sell it today you would earn a total of 292.00 from holding Qbe Insurance Group or generate 17.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Australian Unity Office
Performance |
| Timeline |
| Qbe Insurance Group |
| Australian Unity Office |
Qbe Insurance and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Australian Unity
The main advantage of trading using opposite Qbe Insurance and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Qbe Insurance vs. PVW Resources | Qbe Insurance vs. Woolworths | Qbe Insurance vs. Wesfarmers | Qbe Insurance vs. Coles Group |
| Australian Unity vs. Bank of Queensland | Australian Unity vs. Finexia Financial Group | Australian Unity vs. Wt Financial Group | Australian Unity vs. WiseTech Global Limited |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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