Correlation Between Qbe Insurance and MA Financial
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and MA Financial 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 MA Financial 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 MA Financial Group, you can compare the effects of market volatilities on Qbe Insurance and MA Financial 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 MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and MA Financial.
Diversification Opportunities for Qbe Insurance and MA Financial
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Qbe and MAF is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial 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 MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and MA Financial go up and down completely randomly.
Pair Corralation between Qbe Insurance and MA Financial
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.86 times more return on investment than MA Financial. However, Qbe Insurance Group is 1.16 times less risky than MA Financial. It trades about 0.44 of its potential returns per unit of risk. MA Financial Group is currently generating about 0.09 per unit of risk. If you would invest 1,721 in Qbe Insurance Group on August 27, 2024 and sell it today you would earn a total of 257.00 from holding Qbe Insurance Group or generate 14.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. MA Financial Group
Performance |
| Timeline |
| Qbe Insurance Group |
| MA Financial Group |
Qbe Insurance and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and MA Financial
The main advantage of trading using opposite Qbe Insurance and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, MA Financial 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 MA Financial will offset losses from the drop in MA Financial's long position.| Qbe Insurance vs. Nine Entertainment Co | Qbe Insurance vs. Beston Global Food | Qbe Insurance vs. oOhMedia | Qbe Insurance vs. Aurelia Metals |
| MA Financial vs. Kneomedia | MA Financial vs. Andean Silver Limited | MA Financial vs. Sky Metals | MA Financial vs. Metro 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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