Correlation Between Regal Investment and Qbe Insurance
Can any of the company-specific risk be diversified away by investing in both Regal Investment and Qbe Insurance 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 Regal Investment and Qbe Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and Qbe Insurance Group, you can compare the effects of market volatilities on Regal Investment and Qbe Insurance 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 Regal Investment with a short position of Qbe Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and Qbe Insurance.
Diversification Opportunities for Regal Investment and Qbe Insurance
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regal and Qbe is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Qbe Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qbe Insurance Group and Regal Investment 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 Regal Investment are associated (or correlated) with Qbe Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qbe Insurance Group has no effect on the direction of Regal Investment i.e., Regal Investment and Qbe Insurance go up and down completely randomly.
Pair Corralation between Regal Investment and Qbe Insurance
Assuming the 90 days trading horizon Regal Investment is expected to generate 70.0 times less return on investment than Qbe Insurance. But when comparing it to its historical volatility, Regal Investment is 1.35 times less risky than Qbe Insurance. It trades about 0.0 of its potential returns per unit of risk. Qbe Insurance Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,905 in Qbe Insurance Group on October 12, 2024 and sell it today you would earn a total of 58.00 from holding Qbe Insurance Group or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Investment vs. Qbe Insurance Group
Performance |
| Timeline |
| Regal Investment |
| Qbe Insurance Group |
Regal Investment and Qbe Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and Qbe Insurance
The main advantage of trading using opposite Regal Investment and Qbe Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, Qbe Insurance 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 Qbe Insurance will offset losses from the drop in Qbe Insurance's long position.| Regal Investment vs. National Storage REIT | Regal Investment vs. Pinnacle Investment Management | Regal Investment vs. Clime Investment Management | Regal Investment vs. Aristocrat Leisure |
| Qbe Insurance vs. Djerriwarrh Investments | Qbe Insurance vs. Charter Hall Retail | Qbe Insurance vs. Regal Investment | Qbe Insurance vs. MFF Capital Investments |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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