Correlation Between Qbe Insurance and MetalsGrove Mining
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and MetalsGrove Mining 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 MetalsGrove Mining 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 MetalsGrove Mining, you can compare the effects of market volatilities on Qbe Insurance and MetalsGrove Mining 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 MetalsGrove Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and MetalsGrove Mining.
Diversification Opportunities for Qbe Insurance and MetalsGrove Mining
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qbe and MetalsGrove is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and MetalsGrove Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetalsGrove Mining 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 MetalsGrove Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetalsGrove Mining has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and MetalsGrove Mining go up and down completely randomly.
Pair Corralation between Qbe Insurance and MetalsGrove Mining
Assuming the 90 days trading horizon Qbe Insurance is expected to generate 2.52 times less return on investment than MetalsGrove Mining. But when comparing it to its historical volatility, Qbe Insurance Group is 5.88 times less risky than MetalsGrove Mining. It trades about 0.09 of its potential returns per unit of risk. MetalsGrove Mining is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5.20 in MetalsGrove Mining on October 29, 2024 and sell it today you would earn a total of 0.50 from holding MetalsGrove Mining or generate 9.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. MetalsGrove Mining
Performance |
| Timeline |
| Qbe Insurance Group |
| MetalsGrove Mining |
Qbe Insurance and MetalsGrove Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and MetalsGrove Mining
The main advantage of trading using opposite Qbe Insurance and MetalsGrove Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, MetalsGrove Mining 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 MetalsGrove Mining will offset losses from the drop in MetalsGrove Mining's long position.| Qbe Insurance vs. Complii FinTech Solutions | Qbe Insurance vs. Technology One | Qbe Insurance vs. WiseTech Global Limited | Qbe Insurance vs. Autosports Group |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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