Correlation Between Qbe Insurance and Clime Investment
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Clime Investment 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 Clime Investment 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 Clime Investment Management, you can compare the effects of market volatilities on Qbe Insurance and Clime Investment 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 Clime Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Clime Investment.
Diversification Opportunities for Qbe Insurance and Clime Investment
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Qbe and Clime is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man 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 Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Clime Investment go up and down completely randomly.
Pair Corralation between Qbe Insurance and Clime Investment
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.5 times more return on investment than Clime Investment. However, Qbe Insurance Group is 2.01 times less risky than Clime Investment. It trades about 0.12 of its potential returns per unit of risk. Clime Investment Management is currently generating about 0.03 per unit of risk. If you would invest 1,402 in Qbe Insurance Group on September 2, 2024 and sell it today you would earn a total of 598.00 from holding Qbe Insurance Group or generate 42.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Clime Investment Management
Performance |
| Timeline |
| Qbe Insurance Group |
| Clime Investment Man |
Qbe Insurance and Clime Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Clime Investment
The main advantage of trading using opposite Qbe Insurance and Clime Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Clime Investment 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 Clime Investment will offset losses from the drop in Clime Investment's long position.| Qbe Insurance vs. PVW Resources | Qbe Insurance vs. Woolworths | Qbe Insurance vs. Wesfarmers | Qbe Insurance vs. Coles Group |
| Clime Investment vs. WA1 Resources | Clime Investment vs. Predictive Discovery | Clime Investment vs. Cooper Metals | Clime Investment vs. OD6 Metals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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