Correlation Between QBE Insurance and Gyre Therapeutics
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Gyre Therapeutics 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 Gyre Therapeutics 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 Gyre Therapeutics, you can compare the effects of market volatilities on QBE Insurance and Gyre Therapeutics 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 Gyre Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Gyre Therapeutics.
Diversification Opportunities for QBE Insurance and Gyre Therapeutics
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between QBE and Gyre is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Gyre Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gyre Therapeutics 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 Gyre Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gyre Therapeutics has no effect on the direction of QBE Insurance i.e., QBE Insurance and Gyre Therapeutics go up and down completely randomly.
Pair Corralation between QBE Insurance and Gyre Therapeutics
Assuming the 90 days horizon QBE Insurance Group is expected to generate 0.63 times more return on investment than Gyre Therapeutics. However, QBE Insurance Group is 1.58 times less risky than Gyre Therapeutics. It trades about 0.08 of its potential returns per unit of risk. Gyre Therapeutics is currently generating about 0.0 per unit of risk. If you would invest 1,048 in QBE Insurance Group on August 31, 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. Gyre Therapeutics
Performance |
| Timeline |
| QBE Insurance Group |
| Gyre Therapeutics |
QBE Insurance and Gyre Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Gyre Therapeutics
The main advantage of trading using opposite QBE Insurance and Gyre Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Gyre Therapeutics 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 Gyre Therapeutics will offset losses from the drop in Gyre Therapeutics' long position.The idea behind QBE Insurance Group and Gyre Therapeutics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Gyre Therapeutics vs. Playtika Holding Corp | Gyre Therapeutics vs. Tootsie Roll Industries | Gyre Therapeutics vs. Senmiao Technology | Gyre Therapeutics vs. NETGEAR |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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