Correlation Between QBE Insurance and 654106AJ2
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By analyzing existing cross correlation between QBE Insurance Group and NIKE INC, you can compare the effects of market volatilities on QBE Insurance and 654106AJ2 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 654106AJ2. Check out your portfolio center. Please also check ongoing floating volatility patterns of QBE Insurance and 654106AJ2.
Diversification Opportunities for QBE Insurance and 654106AJ2
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QBE and 654106AJ2 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding QBE Insurance Group and NIKE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 654106AJ2 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 654106AJ2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 654106AJ2 has no effect on the direction of QBE Insurance i.e., QBE Insurance and 654106AJ2 go up and down completely randomly.
Pair Corralation between QBE Insurance and 654106AJ2
Assuming the 90 days horizon QBE Insurance Group is expected to generate 1.54 times more return on investment than 654106AJ2. However, QBE Insurance is 1.54 times more volatile than NIKE INC. It trades about 0.21 of its potential returns per unit of risk. NIKE INC is currently generating about -0.2 per unit of risk. If you would invest 1,115 in QBE Insurance Group on August 31, 2024 and sell it today you would earn a total of 50.00 from holding QBE Insurance Group or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
QBE Insurance Group vs. NIKE INC
Performance |
| Timeline |
| QBE Insurance Group |
| 654106AJ2 |
QBE Insurance and 654106AJ2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with QBE Insurance and 654106AJ2
The main advantage of trading using opposite QBE Insurance and 654106AJ2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QBE Insurance position performs unexpectedly, 654106AJ2 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 654106AJ2 will offset losses from the drop in 654106AJ2's long position.The idea behind QBE Insurance Group and NIKE INC 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.| 654106AJ2 vs. NetEase | 654106AJ2 vs. QBE Insurance Group | 654106AJ2 vs. Citizens | 654106AJ2 vs. Maiden Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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