Correlation Between Qbe Insurance and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Qbe Insurance and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Dow Jones.
Diversification Opportunities for Qbe Insurance and Dow Jones
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qbe and Dow is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Dow Jones go up and down completely randomly.
Pair Corralation between Qbe Insurance and Dow Jones
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 1.74 times more return on investment than Dow Jones. However, Qbe Insurance is 1.74 times more volatile than Dow Jones Industrial. It trades about 0.28 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.19 per unit of risk. If you would invest 1,593 in Qbe Insurance Group on August 31, 2024 and sell it today you would earn a total of 407.00 from holding Qbe Insurance Group or generate 25.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.44% |
| Values | Daily Returns |
Qbe Insurance Group vs. Dow Jones Industrial
Performance |
| Timeline |
Qbe Insurance and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Qbe Insurance Group
Pair trading matchups for Qbe Insurance
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Qbe Insurance and Dow Jones
The main advantage of trading using opposite Qbe Insurance and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Qbe Insurance vs. Iron Road | Qbe Insurance vs. Red Hill Iron | Qbe Insurance vs. ABACUS STORAGE KING | Qbe Insurance vs. Air New Zealand |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |