Correlation Between QBE Insurance and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Ameriprise Financial 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 Ameriprise Financial 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 Ameriprise Financial, you can compare the effects of market volatilities on QBE Insurance and Ameriprise Financial 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 Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Ameriprise Financial.
Diversification Opportunities for QBE Insurance and Ameriprise Financial
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QBE and Ameriprise is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial 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 Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of QBE Insurance i.e., QBE Insurance and Ameriprise Financial go up and down completely randomly.
Pair Corralation between QBE Insurance and Ameriprise Financial
Assuming the 90 days horizon QBE Insurance is expected to generate 1.64 times less return on investment than Ameriprise Financial. But when comparing it to its historical volatility, QBE Insurance Group is 1.97 times less risky than Ameriprise Financial. It trades about 0.33 of its potential returns per unit of risk. Ameriprise Financial is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 46,313 in Ameriprise Financial on August 25, 2024 and sell it today you would earn a total of 8,627 from holding Ameriprise Financial or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Ameriprise Financial
Performance |
| Timeline |
| QBE Insurance Group |
| Ameriprise Financial |
QBE Insurance and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Ameriprise Financial
The main advantage of trading using opposite QBE Insurance and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial'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 |
| Ameriprise Financial vs. The Bank of | Ameriprise Financial vs. Ares Management Corp | Ameriprise Financial vs. Superior Plus Corp | Ameriprise Financial 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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