Correlation Between QBE Insurance and Japan Post
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Japan Post 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 Japan Post 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 Japan Post Insurance, you can compare the effects of market volatilities on QBE Insurance and Japan Post 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 Japan Post. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Japan Post.
Diversification Opportunities for QBE Insurance and Japan Post
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between QBE and Japan is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Japan Post Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Post Insurance 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 Japan Post. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Post Insurance has no effect on the direction of QBE Insurance i.e., QBE Insurance and Japan Post go up and down completely randomly.
Pair Corralation between QBE Insurance and Japan Post
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.73 times more return on investment than Japan Post. However, QBE Insurance Group is 1.38 times less risky than Japan Post. It trades about 0.07 of its potential returns per unit of risk. Japan Post Insurance is currently generating about 0.04 per unit of risk. If you would invest 1,053 in QBE Insurance Group on August 28, 2024 and sell it today you would earn a total of 167.00 from holding QBE Insurance Group or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Japan Post Insurance
Performance |
| Timeline |
| QBE Insurance Group |
| Japan Post Insurance |
QBE Insurance and Japan Post Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Japan Post
The main advantage of trading using opposite QBE Insurance and Japan Post positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Japan Post 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 Japan Post will offset losses from the drop in Japan Post's long position.| QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. Origin Agritech | QBE Insurance vs. SIVERS SEMICONDUCTORS AB |
| Japan Post vs. CONAGRA FOODS | Japan Post vs. Dairy Farm International | Japan Post vs. Mitsui Chemicals | Japan Post vs. CHEMICAL INDUSTRIES |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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