Correlation Between QBE Insurance and CompuGroup Medical
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and CompuGroup Medical 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 CompuGroup Medical 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 CompuGroup Medical SE, you can compare the effects of market volatilities on QBE Insurance and CompuGroup Medical 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 CompuGroup Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and CompuGroup Medical.
Diversification Opportunities for QBE Insurance and CompuGroup Medical
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between QBE and CompuGroup is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and CompuGroup Medical SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CompuGroup Medical 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 CompuGroup Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CompuGroup Medical has no effect on the direction of QBE Insurance i.e., QBE Insurance and CompuGroup Medical go up and down completely randomly.
Pair Corralation between QBE Insurance and CompuGroup Medical
Assuming the 90 days horizon QBE Insurance Group is expected to generate 1.31 times more return on investment than CompuGroup Medical. However, QBE Insurance is 1.31 times more volatile than CompuGroup Medical SE. It trades about 0.21 of its potential returns per unit of risk. CompuGroup Medical SE is currently generating about 0.26 per unit of risk. If you would invest 1,190 in QBE Insurance Group on November 6, 2024 and sell it today you would earn a total of 60.00 from holding QBE Insurance Group or generate 5.04% 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. CompuGroup Medical SE
Performance |
| Timeline |
| QBE Insurance Group |
| CompuGroup Medical |
QBE Insurance and CompuGroup Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and CompuGroup Medical
The main advantage of trading using opposite QBE Insurance and CompuGroup Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, CompuGroup Medical 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 CompuGroup Medical will offset losses from the drop in CompuGroup Medical's long position.| QBE Insurance vs. Cardinal Health | QBE Insurance vs. OPKO HEALTH | QBE Insurance vs. Kingdee International Software | QBE Insurance vs. MPH Health Care |
| CompuGroup Medical vs. AGNC INVESTMENT | CompuGroup Medical vs. Gladstone Investment | CompuGroup Medical vs. SEI INVESTMENTS | CompuGroup Medical vs. Minerals Technologies |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |