Correlation Between QBE Insurance and Socit Gnrale
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Socit Gnrale 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 Socit Gnrale 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 Socit Gnrale Socit, you can compare the effects of market volatilities on QBE Insurance and Socit Gnrale 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 Socit Gnrale. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Socit Gnrale.
Diversification Opportunities for QBE Insurance and Socit Gnrale
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QBE and Socit is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of QBE Insurance i.e., QBE Insurance and Socit Gnrale go up and down completely randomly.
Pair Corralation between QBE Insurance and Socit Gnrale
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.55 times more return on investment than Socit Gnrale. However, QBE Insurance Group is 1.82 times less risky than Socit Gnrale. It trades about 0.42 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about 0.06 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. Socit Gnrale Socit
Performance |
| Timeline |
| QBE Insurance Group |
| Socit Gnrale Socit |
QBE Insurance and Socit Gnrale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Socit Gnrale
The main advantage of trading using opposite QBE Insurance and Socit Gnrale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Socit Gnrale 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 Socit Gnrale will offset losses from the drop in Socit Gnrale's long position.| QBE Insurance vs. Darden Restaurants | QBE Insurance vs. AIR PRODCHEMICALS | QBE Insurance vs. Japan Tobacco | QBE Insurance vs. Strategic Education |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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