Correlation Between Qbe Insurance and TPG Telecom
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and TPG Telecom 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 TPG Telecom 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 TPG Telecom, you can compare the effects of market volatilities on Qbe Insurance and TPG Telecom 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 TPG Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and TPG Telecom.
Diversification Opportunities for Qbe Insurance and TPG Telecom
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Qbe and TPG is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and TPG Telecom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TPG Telecom 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 TPG Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TPG Telecom has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and TPG Telecom go up and down completely randomly.
Pair Corralation between Qbe Insurance and TPG Telecom
Assuming the 90 days trading horizon Qbe Insurance Group is expected to generate 1.17 times more return on investment than TPG Telecom. However, Qbe Insurance is 1.17 times more volatile than TPG Telecom. It trades about 0.21 of its potential returns per unit of risk. TPG Telecom is currently generating about 0.17 per unit of risk. If you would invest 2,030 in Qbe Insurance Group on November 28, 2024 and sell it today you would earn a total of 126.00 from holding Qbe Insurance Group or generate 6.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qbe Insurance Group vs. TPG Telecom
Performance |
| Timeline |
| Qbe Insurance Group |
| TPG Telecom |
Qbe Insurance and TPG Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and TPG Telecom
The main advantage of trading using opposite Qbe Insurance and TPG Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, TPG Telecom 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 TPG Telecom will offset losses from the drop in TPG Telecom's long position.| Qbe Insurance vs. Galena Mining | Qbe Insurance vs. Aeris Environmental | Qbe Insurance vs. Duketon Mining | Qbe Insurance vs. Truscott Mining Corp |
| TPG Telecom vs. ARN Media Limited | TPG Telecom vs. Australian Strategic Materials | TPG Telecom vs. Spirit Telecom | TPG Telecom vs. ChemX Materials |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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