Correlation Between QBE Insurance and Amazon
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Amazon 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 Amazon 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 Amazon Inc, you can compare the effects of market volatilities on QBE Insurance and Amazon 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 Amazon. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Amazon.
Diversification Opportunities for QBE Insurance and Amazon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QBE and Amazon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Amazon Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amazon Inc 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 Amazon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amazon Inc has no effect on the direction of QBE Insurance i.e., QBE Insurance and Amazon go up and down completely randomly.
Pair Corralation between QBE Insurance and Amazon
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.78 times more return on investment than Amazon. However, QBE Insurance Group is 1.28 times less risky than Amazon. It trades about 0.59 of its potential returns per unit of risk. Amazon Inc is currently generating about 0.22 per unit of risk. If you would invest 1,020 in QBE Insurance Group on September 3, 2024 and sell it today you would earn a total of 200.00 from holding QBE Insurance Group or generate 19.61% 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. Amazon Inc
Performance |
| Timeline |
| QBE Insurance Group |
| Amazon Inc |
QBE Insurance and Amazon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Amazon
The main advantage of trading using opposite QBE Insurance and Amazon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Amazon 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 Amazon will offset losses from the drop in Amazon's long position.| QBE Insurance vs. INFORMATION SVC GRP | QBE Insurance vs. Fidelity National Information | QBE Insurance vs. PUBLIC STORAGE PRFO | QBE Insurance vs. DOCDATA |
| Amazon vs. Perseus Mining Limited | Amazon vs. Ming Le Sports | Amazon vs. MCEWEN MINING INC | Amazon vs. Gaztransport Technigaz SA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |