Correlation Between QBE Insurance and H FARM
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and H FARM 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 H FARM 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 H FARM SPA, you can compare the effects of market volatilities on QBE Insurance and H FARM 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 H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and H FARM.
Diversification Opportunities for QBE Insurance and H FARM
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QBE and 5JQ is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA 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 H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of QBE Insurance i.e., QBE Insurance and H FARM go up and down completely randomly.
Pair Corralation between QBE Insurance and H FARM
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.27 times more return on investment than H FARM. However, QBE Insurance Group is 3.69 times less risky than H FARM. It trades about 0.09 of its potential returns per unit of risk. H FARM SPA is currently generating about 0.01 per unit of risk. If you would invest 869.00 in QBE Insurance Group on August 24, 2024 and sell it today you would earn a total of 311.00 from holding QBE Insurance Group or generate 35.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. H FARM SPA
Performance |
| Timeline |
| QBE Insurance Group |
| H FARM SPA |
QBE Insurance and H FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and H FARM
The main advantage of trading using opposite QBE Insurance and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.| QBE Insurance vs. Insurance Australia Group | QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. Origin Agritech |
| H FARM vs. The Bank of | H FARM vs. Ares Management Corp | H FARM vs. Superior Plus Corp | H FARM 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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