Correlation Between QBE Insurance and CHINA SOUTHN
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and CHINA SOUTHN 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 CHINA SOUTHN 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 CHINA SOUTHN AIR H , you can compare the effects of market volatilities on QBE Insurance and CHINA SOUTHN 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 CHINA SOUTHN. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and CHINA SOUTHN.
Diversification Opportunities for QBE Insurance and CHINA SOUTHN
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between QBE and CHINA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and CHINA SOUTHN AIR H in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA SOUTHN AIR 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 CHINA SOUTHN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA SOUTHN AIR has no effect on the direction of QBE Insurance i.e., QBE Insurance and CHINA SOUTHN go up and down completely randomly.
Pair Corralation between QBE Insurance and CHINA SOUTHN
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.39 times more return on investment than CHINA SOUTHN. However, QBE Insurance Group is 2.57 times less risky than CHINA SOUTHN. It trades about 0.21 of its potential returns per unit of risk. CHINA SOUTHN AIR H is currently generating about -0.17 per unit of risk. If you would invest 1,140 in QBE Insurance Group on October 12, 2024 and sell it today you would earn a total of 40.00 from holding QBE Insurance Group or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
QBE Insurance Group vs. CHINA SOUTHN AIR H
Performance |
| Timeline |
| QBE Insurance Group |
| CHINA SOUTHN AIR |
QBE Insurance and CHINA SOUTHN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and CHINA SOUTHN
The main advantage of trading using opposite QBE Insurance and CHINA SOUTHN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, CHINA SOUTHN 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 CHINA SOUTHN will offset losses from the drop in CHINA SOUTHN's long position.| QBE Insurance vs. SALESFORCE INC CDR | QBE Insurance vs. CODERE ONLINE LUX | QBE Insurance vs. USU Software AG | QBE Insurance vs. UPDATE SOFTWARE |
| CHINA SOUTHN vs. Insurance Australia Group | CHINA SOUTHN vs. QBE Insurance Group | CHINA SOUTHN vs. SBI Insurance Group | CHINA SOUTHN vs. Reinsurance Group of |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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