Correlation Between QBE Insurance and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and WIMFARM SA 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 WIMFARM SA 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 WIMFARM SA EO, you can compare the effects of market volatilities on QBE Insurance and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and WIMFARM SA.
Diversification Opportunities for QBE Insurance and WIMFARM SA
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QBE and WIMFARM is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of QBE Insurance i.e., QBE Insurance and WIMFARM SA go up and down completely randomly.
Pair Corralation between QBE Insurance and WIMFARM SA
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.45 times more return on investment than WIMFARM SA. However, QBE Insurance Group is 2.21 times less risky than WIMFARM SA. It trades about 0.07 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.07 per unit of risk. If you would invest 744.00 in QBE Insurance Group on August 28, 2024 and sell it today you would earn a total of 476.00 from holding QBE Insurance Group or generate 63.98% 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. WIMFARM SA EO
Performance |
| Timeline |
| QBE Insurance Group |
| WIMFARM SA EO |
QBE Insurance and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and WIMFARM SA
The main advantage of trading using opposite QBE Insurance and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA'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 |
| WIMFARM SA vs. Superior Plus Corp | WIMFARM SA vs. NMI Holdings | WIMFARM SA vs. Origin Agritech | WIMFARM SA vs. SIVERS SEMICONDUCTORS AB |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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