Correlation Between QBE Insurance and INFORMATION SVC
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and INFORMATION SVC 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 INFORMATION SVC 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 INFORMATION SVC GRP, you can compare the effects of market volatilities on QBE Insurance and INFORMATION SVC 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 INFORMATION SVC. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and INFORMATION SVC.
Diversification Opportunities for QBE Insurance and INFORMATION SVC
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between QBE and INFORMATION is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and INFORMATION SVC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INFORMATION SVC GRP 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 INFORMATION SVC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INFORMATION SVC GRP has no effect on the direction of QBE Insurance i.e., QBE Insurance and INFORMATION SVC go up and down completely randomly.
Pair Corralation between QBE Insurance and INFORMATION SVC
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.7 times more return on investment than INFORMATION SVC. However, QBE Insurance Group is 1.43 times less risky than INFORMATION SVC. It trades about 0.07 of its potential returns per unit of risk. INFORMATION SVC GRP is currently generating about 0.0 per unit of risk. If you would invest 740.00 in QBE Insurance Group on September 3, 2024 and sell it today you would earn a total of 480.00 from holding QBE Insurance Group or generate 64.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. INFORMATION SVC GRP
Performance |
| Timeline |
| QBE Insurance Group |
| INFORMATION SVC GRP |
QBE Insurance and INFORMATION SVC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and INFORMATION SVC
The main advantage of trading using opposite QBE Insurance and INFORMATION SVC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, INFORMATION SVC 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 INFORMATION SVC will offset losses from the drop in INFORMATION SVC's long position.| QBE Insurance vs. INFORMATION SVC GRP | QBE Insurance vs. Fidelity National Information | QBE Insurance vs. PUBLIC STORAGE PRFO | QBE Insurance vs. DOCDATA |
| INFORMATION SVC vs. TOTAL GABON | INFORMATION SVC vs. Walgreens Boots Alliance | INFORMATION SVC vs. Peak Resources Limited |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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