Correlation Between QBE Insurance and CHIBA BANK
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and CHIBA BANK 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 CHIBA BANK 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 CHIBA BANK, you can compare the effects of market volatilities on QBE Insurance and CHIBA BANK 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 CHIBA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and CHIBA BANK.
Diversification Opportunities for QBE Insurance and CHIBA BANK
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and CHIBA is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and CHIBA BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHIBA BANK 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 CHIBA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHIBA BANK has no effect on the direction of QBE Insurance i.e., QBE Insurance and CHIBA BANK go up and down completely randomly.
Pair Corralation between QBE Insurance and CHIBA BANK
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.69 times more return on investment than CHIBA BANK. However, QBE Insurance Group is 1.45 times less risky than CHIBA BANK. It trades about 0.59 of its potential returns per unit of risk. CHIBA BANK is currently generating about 0.31 per unit of risk. If you would invest 1,020 in QBE Insurance Group on September 4, 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 | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
QBE Insurance Group vs. CHIBA BANK
Performance |
| Timeline |
| QBE Insurance Group |
| CHIBA BANK |
QBE Insurance and CHIBA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and CHIBA BANK
The main advantage of trading using opposite QBE Insurance and CHIBA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, CHIBA BANK 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 CHIBA BANK will offset losses from the drop in CHIBA BANK's long position.| QBE Insurance vs. Hitachi Construction Machinery | QBE Insurance vs. INDOFOOD AGRI RES | QBE Insurance vs. Lery Seafood Group | QBE Insurance vs. HF FOODS GRP |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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