Correlation Between QBE Insurance and Casio Computer
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Casio Computer 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 Casio Computer 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 Casio Computer CoLtd, you can compare the effects of market volatilities on QBE Insurance and Casio Computer 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 Casio Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Casio Computer.
Diversification Opportunities for QBE Insurance and Casio Computer
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between QBE and Casio is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Casio Computer CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Casio Computer CoLtd 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 Casio Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Casio Computer CoLtd has no effect on the direction of QBE Insurance i.e., QBE Insurance and Casio Computer go up and down completely randomly.
Pair Corralation between QBE Insurance and Casio Computer
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.9 times more return on investment than Casio Computer. However, QBE Insurance Group is 1.11 times less risky than Casio Computer. It trades about 0.09 of its potential returns per unit of risk. Casio Computer CoLtd is currently generating about 0.01 per unit of risk. If you would invest 846.00 in QBE Insurance Group on September 24, 2024 and sell it today you would earn a total of 294.00 from holding QBE Insurance Group or generate 34.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Casio Computer CoLtd
Performance |
| Timeline |
| QBE Insurance Group |
| Casio Computer CoLtd |
QBE Insurance and Casio Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Casio Computer
The main advantage of trading using opposite QBE Insurance and Casio Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Casio Computer 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 Casio Computer will offset losses from the drop in Casio Computer's long position.| QBE Insurance vs. The Progressive | QBE Insurance vs. The Allstate | QBE Insurance vs. PICC Property and | QBE Insurance vs. Cincinnati Financial |
| Casio Computer vs. Ameriprise Financial | Casio Computer vs. BURLINGTON STORES | Casio Computer vs. QBE Insurance Group | Casio Computer vs. OAKTRSPECLENDNEW |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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