Correlation Between QBE Insurance and China Reinsurance
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and China Reinsurance 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 China Reinsurance 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 China Reinsurance, you can compare the effects of market volatilities on QBE Insurance and China Reinsurance 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 China Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and China Reinsurance.
Diversification Opportunities for QBE Insurance and China Reinsurance
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QBE and China is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and China Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reinsurance 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 China Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reinsurance has no effect on the direction of QBE Insurance i.e., QBE Insurance and China Reinsurance go up and down completely randomly.
Pair Corralation between QBE Insurance and China Reinsurance
Assuming the 90 days horizon QBE Insurance Group is expected to under-perform the China Reinsurance. But the stock apears to be less risky and, when comparing its historical volatility, QBE Insurance Group is 4.56 times less risky than China Reinsurance. The stock trades about -0.01 of its potential returns per unit of risk. The China Reinsurance is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 9.30 in China Reinsurance on October 30, 2024 and sell it today you would earn a total of 0.45 from holding China Reinsurance or generate 4.84% 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. China Reinsurance
Performance |
| Timeline |
| QBE Insurance Group |
| China Reinsurance |
QBE Insurance and China Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and China Reinsurance
The main advantage of trading using opposite QBE Insurance and China Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, China Reinsurance 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 China Reinsurance will offset losses from the drop in China Reinsurance's long position.| QBE Insurance vs. STGEORGE MINING LTD | QBE Insurance vs. Monument Mining Limited | QBE Insurance vs. CLEAN ENERGY FUELS | QBE Insurance vs. Carnegie Clean Energy |
| China Reinsurance vs. Swiss Re AG | China Reinsurance vs. Reinsurance Group of | China Reinsurance vs. Superior Plus Corp | China Reinsurance vs. Origin Agritech |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |