Correlation Between Qbe Insurance and Cromwell Property
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Cromwell Property 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 Cromwell Property 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 Cromwell Property Group, you can compare the effects of market volatilities on Qbe Insurance and Cromwell Property 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 Cromwell Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Cromwell Property.
Diversification Opportunities for Qbe Insurance and Cromwell Property
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qbe and Cromwell is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Cromwell Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cromwell Property 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 Cromwell Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cromwell Property has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Cromwell Property go up and down completely randomly.
Pair Corralation between Qbe Insurance and Cromwell Property
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.74 times more return on investment than Cromwell Property. However, Qbe Insurance Group is 1.35 times less risky than Cromwell Property. It trades about 0.51 of its potential returns per unit of risk. Cromwell Property Group is currently generating about -0.16 per unit of risk. If you would invest 1,690 in Qbe Insurance Group on September 3, 2024 and sell it today you would earn a total of 310.00 from holding Qbe Insurance Group or generate 18.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Cromwell Property Group
Performance |
| Timeline |
| Qbe Insurance Group |
| Cromwell Property |
Qbe Insurance and Cromwell Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Cromwell Property
The main advantage of trading using opposite Qbe Insurance and Cromwell Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Cromwell Property 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 Cromwell Property will offset losses from the drop in Cromwell Property's long position.| Qbe Insurance vs. Audio Pixels Holdings | Qbe Insurance vs. Iodm | Qbe Insurance vs. Nsx | Qbe Insurance vs. TTG Fintech |
| Cromwell Property vs. Viva Leisure | Cromwell Property vs. ACDC Metals | Cromwell Property vs. Aeon Metals | Cromwell Property vs. Perseus Mining |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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