Correlation Between QBE Insurance and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on QBE Insurance and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Safestore Holdings.
Diversification Opportunities for QBE Insurance and Safestore Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between QBE and Safestore is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of QBE Insurance i.e., QBE Insurance and Safestore Holdings go up and down completely randomly.
Pair Corralation between QBE Insurance and Safestore Holdings
Assuming the 90 days horizon QBE Insurance Group is expected to generate 1.01 times more return on investment than Safestore Holdings. However, QBE Insurance is 1.01 times more volatile than Safestore Holdings plc. It trades about 0.06 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.07 per unit of risk. If you would invest 1,043 in QBE Insurance Group on September 26, 2024 and sell it today you would earn a total of 107.00 from holding QBE Insurance Group or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Safestore Holdings plc
Performance |
| Timeline |
| QBE Insurance Group |
| Safestore Holdings plc |
QBE Insurance and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Safestore Holdings
The main advantage of trading using opposite QBE Insurance and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| QBE Insurance vs. The Progressive | QBE Insurance vs. The Allstate | QBE Insurance vs. PICC Property and | QBE Insurance vs. Cincinnati Financial |
| Safestore Holdings vs. GRIFFIN MINING LTD | Safestore Holdings vs. QBE Insurance Group | Safestore Holdings vs. United Insurance Holdings | Safestore Holdings vs. Ping An Insurance |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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