Correlation Between Qbe Insurance and Lendlease
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Lendlease 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 Lendlease 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 Lendlease Group, you can compare the effects of market volatilities on Qbe Insurance and Lendlease 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 Lendlease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Lendlease.
Diversification Opportunities for Qbe Insurance and Lendlease
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Qbe and Lendlease is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Lendlease Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendlease Group 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 Lendlease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendlease Group has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Lendlease go up and down completely randomly.
Pair Corralation between Qbe Insurance and Lendlease
Assuming the 90 days trading horizon Qbe Insurance is expected to generate 1.81 times less return on investment than Lendlease. But when comparing it to its historical volatility, Qbe Insurance Group is 1.08 times less risky than Lendlease. It trades about 0.07 of its potential returns per unit of risk. Lendlease Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 581.00 in Lendlease Group on August 30, 2024 and sell it today you would earn a total of 128.00 from holding Lendlease Group or generate 22.03% 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. Lendlease Group
Performance |
| Timeline |
| Qbe Insurance Group |
| Lendlease Group |
Qbe Insurance and Lendlease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Lendlease
The main advantage of trading using opposite Qbe Insurance and Lendlease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Lendlease 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 Lendlease will offset losses from the drop in Lendlease's long position.| Qbe Insurance vs. Premier Investments | Qbe Insurance vs. Retail Food Group | Qbe Insurance vs. REGAL ASIAN INVESTMENTS | Qbe Insurance vs. BKI Investment |
| Lendlease vs. Kingsrose Mining | Lendlease vs. Flagship Investments | Lendlease vs. Medical Developments International | Lendlease vs. Nova Eye Medical |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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