Correlation Between QBE Insurance and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both QBE Insurance and Teleflex Incorporated 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 Teleflex Incorporated 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 Teleflex Incorporated, you can compare the effects of market volatilities on QBE Insurance and Teleflex Incorporated 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 Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and Teleflex Incorporated.
Diversification Opportunities for QBE Insurance and Teleflex Incorporated
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between QBE and Teleflex is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated 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 Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of QBE Insurance i.e., QBE Insurance and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between QBE Insurance and Teleflex Incorporated
Assuming the 90 days horizon QBE Insurance Group is expected to generate 3.22 times more return on investment than Teleflex Incorporated. However, QBE Insurance is 3.22 times more volatile than Teleflex Incorporated. It trades about 0.14 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.07 per unit of risk. If you would invest 1,256 in QBE Insurance Group on November 29, 2024 and sell it today you would earn a total of 134.00 from holding QBE Insurance Group or generate 10.67% 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. Teleflex Incorporated
Performance |
| Timeline |
| QBE Insurance Group |
| Teleflex Incorporated |
QBE Insurance and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and Teleflex Incorporated
The main advantage of trading using opposite QBE Insurance and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, Teleflex Incorporated 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 Teleflex Incorporated will offset losses from the drop in Teleflex Incorporated's long position.The idea behind QBE Insurance Group and Teleflex Incorporated 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.| Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. Alcon AG | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. ICU Medical |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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