Correlation Between QBE Insurance and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and SANOK RUBBER 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 SANOK RUBBER 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 SANOK RUBBER ZY, you can compare the effects of market volatilities on QBE Insurance and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and SANOK RUBBER.
Diversification Opportunities for QBE Insurance and SANOK RUBBER
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and SANOK is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of QBE Insurance i.e., QBE Insurance and SANOK RUBBER go up and down completely randomly.
Pair Corralation between QBE Insurance and SANOK RUBBER
Assuming the 90 days horizon QBE Insurance is expected to generate 1.95 times less return on investment than SANOK RUBBER. But when comparing it to its historical volatility, QBE Insurance Group is 1.83 times less risky than SANOK RUBBER. It trades about 0.07 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 338.00 in SANOK RUBBER ZY on August 29, 2024 and sell it today you would earn a total of 96.00 from holding SANOK RUBBER ZY or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. SANOK RUBBER ZY
Performance |
| Timeline |
| QBE Insurance Group |
| SANOK RUBBER ZY |
QBE Insurance and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and SANOK RUBBER
The main advantage of trading using opposite QBE Insurance and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| QBE Insurance vs. Darden Restaurants | QBE Insurance vs. AIR PRODCHEMICALS | QBE Insurance vs. Japan Tobacco | QBE Insurance vs. Strategic Education |
| SANOK RUBBER vs. PT Astra International | SANOK RUBBER vs. Continental Aktiengesellschaft | SANOK RUBBER vs. Superior Plus Corp | SANOK RUBBER vs. NMI Holdings |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |