Correlation Between Qbe Insurance and WA1 Resources
Can any of the company-specific risk be diversified away by investing in both Qbe Insurance and WA1 Resources 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 WA1 Resources 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 WA1 Resources, you can compare the effects of market volatilities on Qbe Insurance and WA1 Resources 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 WA1 Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qbe Insurance and WA1 Resources.
Diversification Opportunities for Qbe Insurance and WA1 Resources
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Qbe and WA1 is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Qbe Insurance Group and WA1 Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WA1 Resources 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 WA1 Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WA1 Resources has no effect on the direction of Qbe Insurance i.e., Qbe Insurance and WA1 Resources go up and down completely randomly.
Pair Corralation between Qbe Insurance and WA1 Resources
Assuming the 90 days trading horizon Qbe Insurance is expected to generate 6.02 times less return on investment than WA1 Resources. But when comparing it to its historical volatility, Qbe Insurance Group is 4.16 times less risky than WA1 Resources. It trades about 0.07 of its potential returns per unit of risk. WA1 Resources is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 147.00 in WA1 Resources on October 12, 2024 and sell it today you would earn a total of 1,197 from holding WA1 Resources or generate 814.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Qbe Insurance Group vs. WA1 Resources
Performance |
| Timeline |
| Qbe Insurance Group |
| WA1 Resources |
Qbe Insurance and WA1 Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qbe Insurance and WA1 Resources
The main advantage of trading using opposite Qbe Insurance and WA1 Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qbe Insurance position performs unexpectedly, WA1 Resources 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 WA1 Resources will offset losses from the drop in WA1 Resources' long position.| Qbe Insurance vs. Djerriwarrh Investments | Qbe Insurance vs. Charter Hall Retail | Qbe Insurance vs. Regal Investment | Qbe Insurance vs. MFF Capital Investments |
| WA1 Resources vs. Magellan Financial Group | WA1 Resources vs. Qbe Insurance Group | WA1 Resources vs. Medibank Private | WA1 Resources vs. Collins Foods |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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