Correlation Between Qbe Insurance and Legacy Iron
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Legacy Iron 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 Legacy Iron 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 Legacy Iron Ore, you can compare the effects of market volatilities on Qbe Insurance and Legacy Iron 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 Legacy Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Legacy Iron.
Diversification Opportunities for Qbe Insurance and Legacy Iron
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Qbe and Legacy is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Legacy Iron Ore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Legacy Iron Ore 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 Legacy Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Legacy Iron Ore has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Legacy Iron go up and down completely randomly.
Pair Corralation between Qbe Insurance and Legacy Iron
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.22 times more return on investment than Legacy Iron. However, Qbe Insurance Group is 4.55 times less risky than Legacy Iron. It trades about -0.01 of its potential returns per unit of risk. Legacy Iron Ore is currently generating about -0.31 per unit of risk. If you would invest 1,899 in Qbe Insurance Group on September 15, 2024 and sell it today you would lose (9.00) from holding Qbe Insurance Group or give up 0.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Legacy Iron Ore
Performance |
| Timeline |
| Qbe Insurance Group |
| Legacy Iron Ore |
Qbe Insurance and Legacy Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Legacy Iron
The main advantage of trading using opposite Qbe Insurance and Legacy Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Legacy Iron 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 Legacy Iron will offset losses from the drop in Legacy Iron's long position.| Qbe Insurance vs. Falcon Metals | Qbe Insurance vs. Alto Metals | Qbe Insurance vs. Carnegie Clean Energy | Qbe Insurance vs. Emetals |
| Legacy Iron vs. MetalsGrove Mining | Legacy Iron vs. Qbe Insurance Group | Legacy Iron vs. Talisman Mining | Legacy Iron 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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