Correlation Between QBE Insurance and Firan Technology
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Firan Technology 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 Firan Technology 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 Firan Technology Group, you can compare the effects of market volatilities on QBE Insurance and Firan Technology 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 Firan Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Firan Technology.
Diversification Opportunities for QBE Insurance and Firan Technology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QBE and Firan is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Firan Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firan Technology 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 Firan Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firan Technology has no effect on the direction of QBE Insurance i.e., QBE Insurance and Firan Technology go up and down completely randomly.
Pair Corralation between QBE Insurance and Firan Technology
Assuming the 90 days horizon QBE Insurance is expected to generate 1.07 times less return on investment than Firan Technology. But when comparing it to its historical volatility, QBE Insurance Group is 1.44 times less risky than Firan Technology. It trades about 0.17 of its potential returns per unit of risk. Firan Technology Group is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 396.00 in Firan Technology Group on November 4, 2024 and sell it today you would earn a total of 134.00 from holding Firan Technology Group or generate 33.84% 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. Firan Technology Group
Performance |
| Timeline |
| QBE Insurance Group |
| Firan Technology |
QBE Insurance and Firan Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Firan Technology
The main advantage of trading using opposite QBE Insurance and Firan Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Firan Technology 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 Firan Technology will offset losses from the drop in Firan Technology's long position.| QBE Insurance vs. Prosiebensat 1 Media | QBE Insurance vs. CONTAGIOUS GAMING INC | QBE Insurance vs. GAMING FAC SA | QBE Insurance vs. PENN NATL GAMING |
| Firan Technology vs. Infrastrutture Wireless Italiane | Firan Technology vs. Focus Home Interactive | Firan Technology vs. American Homes 4 | Firan Technology vs. HAVERTY FURNITURE A |
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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