Correlation Between Qbe Insurance and Origin Energy
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and Origin Energy 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 Origin Energy 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 Origin Energy, you can compare the effects of market volatilities on Qbe Insurance and Origin Energy 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 Origin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and Origin Energy.
Diversification Opportunities for Qbe Insurance and Origin Energy
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Qbe and Origin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and Origin Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Energy 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 Origin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Energy has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and Origin Energy go up and down completely randomly.
Pair Corralation between Qbe Insurance and Origin Energy
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 1.25 times more return on investment than Origin Energy. However, Qbe Insurance is 1.25 times more volatile than Origin Energy. It trades about 0.26 of its potential returns per unit of risk. Origin Energy is currently generating about 0.14 per unit of risk. If you would invest 1,654 in Qbe Insurance Group on August 29, 2024 and sell it today you would earn a total of 280.00 from holding Qbe Insurance Group or generate 16.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. Origin Energy
Performance |
| Timeline |
| Qbe Insurance Group |
| Origin Energy |
Qbe Insurance and Origin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and Origin Energy
The main advantage of trading using opposite Qbe Insurance and Origin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, Origin Energy 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 Origin Energy will offset losses from the drop in Origin Energy's long position.| Qbe Insurance vs. Red Hill Iron | Qbe Insurance vs. Platinum Asset Management | Qbe Insurance vs. Carlton Investments | Qbe Insurance vs. Hotel Property Investments |
| Origin Energy vs. Qbe Insurance Group | Origin Energy vs. Perpetual Credit Income | Origin Energy vs. Magellan Financial Group | Origin Energy vs. Commonwealth Bank of |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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