Correlation Between QBE Insurance and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and BW OFFSHORE 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 BW OFFSHORE 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 BW OFFSHORE LTD, you can compare the effects of market volatilities on QBE Insurance and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and BW OFFSHORE.
Diversification Opportunities for QBE Insurance and BW OFFSHORE
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between QBE and XY81 is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of QBE Insurance i.e., QBE Insurance and BW OFFSHORE go up and down completely randomly.
Pair Corralation between QBE Insurance and BW OFFSHORE
Assuming the 90 days horizon QBE Insurance is expected to generate 1.05 times less return on investment than BW OFFSHORE. But when comparing it to its historical volatility, QBE Insurance Group is 1.53 times less risky than BW OFFSHORE. It trades about 0.1 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 204.00 in BW OFFSHORE LTD on January 7, 2025 and sell it today you would earn a total of 47.00 from holding BW OFFSHORE LTD or generate 23.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. BW OFFSHORE LTD
Performance |
| Timeline |
| QBE Insurance Group |
| BW OFFSHORE LTD |
QBE Insurance and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and BW OFFSHORE
The main advantage of trading using opposite QBE Insurance and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| QBE Insurance vs. Playa Hotels Resorts | QBE Insurance vs. Dalata Hotel Group | QBE Insurance vs. DALATA HOTEL | QBE Insurance vs. Emperor Entertainment Hotel |
| BW OFFSHORE vs. HK Electric Investments | BW OFFSHORE vs. Ping An Insurance | BW OFFSHORE vs. Zurich Insurance Group | BW OFFSHORE vs. Strategic Investments AS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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