Correlation Between QBE Insurance and FORMPIPE SOFTWARE
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB, you can compare the effects of market volatilities on QBE Insurance and FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and FORMPIPE SOFTWARE.
Diversification Opportunities for QBE Insurance and FORMPIPE SOFTWARE
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and FORMPIPE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and FORMPIPE SOFTWARE AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORMPIPE SOFTWARE has no effect on the direction of QBE Insurance i.e., QBE Insurance and FORMPIPE SOFTWARE go up and down completely randomly.
Pair Corralation between QBE Insurance and FORMPIPE SOFTWARE
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.35 times more return on investment than FORMPIPE SOFTWARE. However, QBE Insurance Group is 2.88 times less risky than FORMPIPE SOFTWARE. It trades about 0.21 of its potential returns per unit of risk. FORMPIPE SOFTWARE AB is currently generating about -0.09 per unit of risk. If you would invest 1,190 in QBE Insurance Group on November 7, 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. FORMPIPE SOFTWARE AB
Performance |
| Timeline |
| QBE Insurance Group |
| FORMPIPE SOFTWARE |
QBE Insurance and FORMPIPE SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and FORMPIPE SOFTWARE
The main advantage of trading using opposite QBE Insurance and FORMPIPE SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE will offset losses from the drop in FORMPIPE SOFTWARE's long position.| QBE Insurance vs. CALTAGIRONE EDITORE | QBE Insurance vs. The Yokohama Rubber | QBE Insurance vs. Summit Materials | QBE Insurance vs. NEWELL RUBBERMAID |
| FORMPIPE SOFTWARE vs. Phibro Animal Health | FORMPIPE SOFTWARE vs. MPH Health Care | FORMPIPE SOFTWARE vs. United Natural Foods | FORMPIPE SOFTWARE vs. Acadia Healthcare |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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