Correlation Between QBE Insurance and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and AmTrust Financial 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 AmTrust Financial 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 AmTrust Financial Services, you can compare the effects of market volatilities on QBE Insurance and AmTrust Financial 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 AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and AmTrust Financial.
Diversification Opportunities for QBE Insurance and AmTrust Financial
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between QBE and AmTrust is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial 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 AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of QBE Insurance i.e., QBE Insurance and AmTrust Financial go up and down completely randomly.
Pair Corralation between QBE Insurance and AmTrust Financial
Assuming the 90 days horizon QBE Insurance Group is expected to generate 1.58 times more return on investment than AmTrust Financial. However, QBE Insurance is 1.58 times more volatile than AmTrust Financial Services. It trades about 0.08 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about 0.01 per unit of risk. If you would invest 1,048 in QBE Insurance Group on September 3, 2024 and sell it today you would earn a total of 117.00 from holding QBE Insurance Group or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. AmTrust Financial Services
Performance |
| Timeline |
| QBE Insurance Group |
| AmTrust Financial |
QBE Insurance and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and AmTrust Financial
The main advantage of trading using opposite QBE Insurance and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| QBE Insurance vs. AmTrust Financial Services | QBE Insurance vs. AmTrust Financial Services | QBE Insurance vs. AmTrust Financial Services | QBE Insurance vs. AmTrust Financial Services |
| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Stocks Directory Find actively traded stocks across global markets |