Correlation Between QBE Insurance and UNIVMUSIC GRPADR050
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on QBE Insurance and UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and UNIVMUSIC GRPADR050.
Diversification Opportunities for QBE Insurance and UNIVMUSIC GRPADR050
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QBE and UNIVMUSIC is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR050 has no effect on the direction of QBE Insurance i.e., QBE Insurance and UNIVMUSIC GRPADR050 go up and down completely randomly.
Pair Corralation between QBE Insurance and UNIVMUSIC GRPADR050
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.73 times more return on investment than UNIVMUSIC GRPADR050. However, QBE Insurance Group is 1.37 times less risky than UNIVMUSIC GRPADR050. It trades about 0.09 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about 0.01 per unit of risk. If you would invest 832.00 in QBE Insurance Group on September 20, 2024 and sell it today you would earn a total of 308.00 from holding QBE Insurance Group or generate 37.02% 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. UNIVMUSIC GRPADR050
Performance |
| Timeline |
| QBE Insurance Group |
| UNIVMUSIC GRPADR050 |
QBE Insurance and UNIVMUSIC GRPADR050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and UNIVMUSIC GRPADR050
The main advantage of trading using opposite QBE Insurance and UNIVMUSIC GRPADR050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, UNIVMUSIC GRPADR050 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 UNIVMUSIC GRPADR050 will offset losses from the drop in UNIVMUSIC GRPADR050's long position.| QBE Insurance vs. INTERCONT HOTELS | QBE Insurance vs. Highlight Communications AG | QBE Insurance vs. Spirent Communications plc | QBE Insurance vs. MELIA HOTELS |
| UNIVMUSIC GRPADR050 vs. SHIN ETSU CHEMICAL | UNIVMUSIC GRPADR050 vs. VIRGIN WINES UK | UNIVMUSIC GRPADR050 vs. TIANDE CHEMICAL | UNIVMUSIC GRPADR050 vs. QBE Insurance Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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