Correlation Between Qbe Insurance and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Hotel 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 Hotel 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 Hotel Property Investments, you can compare the effects of market volatilities on Qbe Insurance and Hotel 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 Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Hotel Property.
Diversification Opportunities for Qbe Insurance and Hotel Property
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Qbe and Hotel is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves 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 Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Hotel Property go up and down completely randomly.
Pair Corralation between Qbe Insurance and Hotel Property
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 2.68 times more return on investment than Hotel Property. However, Qbe Insurance is 2.68 times more volatile than Hotel Property Investments. It trades about 0.43 of its potential returns per unit of risk. Hotel Property Investments is currently generating about 0.38 per unit of risk. If you would invest 1,721 in Qbe Insurance Group on September 1, 2024 and sell it today you would earn a total of 279.00 from holding Qbe Insurance Group or generate 16.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Hotel Property Investments
Performance |
| Timeline |
| Qbe Insurance Group |
| Hotel Property Inves |
Qbe Insurance and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Hotel Property
The main advantage of trading using opposite Qbe Insurance and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Hotel 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| Qbe Insurance vs. Diversified United Investment | Qbe Insurance vs. Bank of Queensland | Qbe Insurance vs. Home Consortium | Qbe Insurance vs. Carlton Investments |
| Hotel Property vs. Queste Communications | Hotel Property vs. Super Retail Group | Hotel Property vs. Retail Food Group | Hotel Property vs. Spirit Telecom |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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