Correlation Between QBE Insurance and Quaker Chemical
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Quaker Chemical 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 Quaker Chemical 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 Quaker Chemical, you can compare the effects of market volatilities on QBE Insurance and Quaker Chemical 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 Quaker Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Quaker Chemical.
Diversification Opportunities for QBE Insurance and Quaker Chemical
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QBE and Quaker is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Quaker Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quaker Chemical 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 Quaker Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quaker Chemical has no effect on the direction of QBE Insurance i.e., QBE Insurance and Quaker Chemical go up and down completely randomly.
Pair Corralation between QBE Insurance and Quaker Chemical
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.57 times more return on investment than Quaker Chemical. However, QBE Insurance Group is 1.75 times less risky than Quaker Chemical. It trades about 0.26 of its potential returns per unit of risk. Quaker Chemical is currently generating about -0.01 per unit of risk. If you would invest 970.00 in QBE Insurance Group on September 2, 2024 and sell it today you would earn a total of 250.00 from holding QBE Insurance Group or generate 25.77% 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. Quaker Chemical
Performance |
| Timeline |
| QBE Insurance Group |
| Quaker Chemical |
QBE Insurance and Quaker Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Quaker Chemical
The main advantage of trading using opposite QBE Insurance and Quaker Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Quaker Chemical 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 Quaker Chemical will offset losses from the drop in Quaker Chemical's long position.| QBE Insurance vs. Nok Airlines PCL | QBE Insurance vs. CSSC Offshore Marine | QBE Insurance vs. GRIFFIN MINING LTD | QBE Insurance vs. United Airlines Holdings |
| Quaker Chemical vs. TEXAS ROADHOUSE | Quaker Chemical vs. SAFETY MEDICAL PROD | Quaker Chemical vs. CENTURIA OFFICE REIT | Quaker Chemical vs. Tower One Wireless |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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