Correlation Between Qbe Insurance and Macquarie Technology
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Macquarie Technology 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 Macquarie Technology 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 Macquarie Technology Group, you can compare the effects of market volatilities on Qbe Insurance and Macquarie Technology 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 Macquarie Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Macquarie Technology.
Diversification Opportunities for Qbe Insurance and Macquarie Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Qbe and Macquarie is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Macquarie Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Technology 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 Macquarie Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Technology has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Macquarie Technology go up and down completely randomly.
Pair Corralation between Qbe Insurance and Macquarie Technology
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 0.62 times more return on investment than Macquarie Technology. However, Qbe Insurance Group is 1.62 times less risky than Macquarie Technology. It trades about 0.3 of its potential returns per unit of risk. Macquarie Technology Group is currently generating about -0.15 per unit of risk. If you would invest 1,981 in Qbe Insurance Group on November 7, 2024 and sell it today you would earn a total of 113.00 from holding Qbe Insurance Group or generate 5.7% 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. Macquarie Technology Group
Performance |
| Timeline |
| Qbe Insurance Group |
| Macquarie Technology |
Qbe Insurance and Macquarie Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Macquarie Technology
The main advantage of trading using opposite Qbe Insurance and Macquarie Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Macquarie Technology 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 Macquarie Technology will offset losses from the drop in Macquarie Technology's long position.| Qbe Insurance vs. Platinum Asset Management | Qbe Insurance vs. Falcon Metals | Qbe Insurance vs. FireFly Metals | Qbe Insurance vs. Centrex Metals |
| Macquarie Technology vs. Stelar Metals | Macquarie Technology vs. DMC Mining | Macquarie Technology vs. Aspire Mining | Macquarie Technology 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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