Correlation Between QBE Insurance and AECOM
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and AECOM 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 AECOM 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 AECOM, you can compare the effects of market volatilities on QBE Insurance and AECOM 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 AECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and AECOM.
Diversification Opportunities for QBE Insurance and AECOM
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QBE and AECOM is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and AECOM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AECOM 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 AECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AECOM has no effect on the direction of QBE Insurance i.e., QBE Insurance and AECOM go up and down completely randomly.
Pair Corralation between QBE Insurance and AECOM
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.5 times more return on investment than AECOM. However, QBE Insurance Group is 2.0 times less risky than AECOM. It trades about 0.57 of its potential returns per unit of risk. AECOM is currently generating about 0.19 per unit of risk. If you would invest 1,020 in QBE Insurance Group on September 5, 2024 and sell it today you would earn a total of 210.00 from holding QBE Insurance Group or generate 20.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
QBE Insurance Group vs. AECOM
Performance |
| Timeline |
| QBE Insurance Group |
| AECOM |
QBE Insurance and AECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and AECOM
The main advantage of trading using opposite QBE Insurance and AECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, AECOM 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 AECOM will offset losses from the drop in AECOM's long position.| QBE Insurance vs. The Allstate | QBE Insurance vs. Fairfax Financial Holdings | QBE Insurance vs. Insurance Australia Group |
| AECOM vs. Universal Insurance Holdings | AECOM vs. NetSol Technologies | AECOM vs. United Insurance Holdings | AECOM vs. QBE Insurance Group |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |