Correlation Between QBE Insurance and Harmony Gold
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Harmony Gold 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 Harmony Gold 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 Harmony Gold Mining, you can compare the effects of market volatilities on QBE Insurance and Harmony Gold 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 Harmony Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Harmony Gold.
Diversification Opportunities for QBE Insurance and Harmony Gold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between QBE and Harmony is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Harmony Gold Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harmony Gold Mining 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 Harmony Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harmony Gold Mining has no effect on the direction of QBE Insurance i.e., QBE Insurance and Harmony Gold go up and down completely randomly.
Pair Corralation between QBE Insurance and Harmony Gold
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.46 times more return on investment than Harmony Gold. However, QBE Insurance Group is 2.18 times less risky than Harmony Gold. It trades about 0.42 of its potential returns per unit of risk. Harmony Gold Mining is currently generating about -0.18 per unit of risk. If you would invest 1,050 in QBE Insurance Group on August 29, 2024 and sell it today you would earn a total of 170.00 from holding QBE Insurance Group or generate 16.19% 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. Harmony Gold Mining
Performance |
| Timeline |
| QBE Insurance Group |
| Harmony Gold Mining |
QBE Insurance and Harmony Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Harmony Gold
The main advantage of trading using opposite QBE Insurance and Harmony Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Harmony Gold 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 Harmony Gold will offset losses from the drop in Harmony Gold's long position.| QBE Insurance vs. Darden Restaurants | QBE Insurance vs. AIR PRODCHEMICALS | QBE Insurance vs. Japan Tobacco | QBE Insurance vs. Strategic Education |
| Harmony Gold vs. Franco Nevada | Harmony Gold vs. Wheaton Precious Metals | Harmony Gold vs. Superior Plus Corp | Harmony Gold vs. NMI Holdings |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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