Correlation Between Regions Financial and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both Regions Financial 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 Regions Financial and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regions Financial and QBE Insurance Group, you can compare the effects of market volatilities on Regions Financial 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 Regions Financial with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regions Financial and QBE Insurance.
Diversification Opportunities for Regions Financial and QBE Insurance
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regions and QBE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Regions Financial 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 Regions Financial 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 Regions Financial 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 Regions Financial i.e., Regions Financial and QBE Insurance go up and down completely randomly.
Pair Corralation between Regions Financial and QBE Insurance
Assuming the 90 days horizon Regions Financial is expected to generate 1.75 times more return on investment than QBE Insurance. However, Regions Financial is 1.75 times more volatile than QBE Insurance Group. It trades about 0.23 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.33 per unit of risk. If you would invest 2,180 in Regions Financial on August 25, 2024 and sell it today you would earn a total of 300.00 from holding Regions Financial or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regions Financial vs. QBE Insurance Group
Performance |
| Timeline |
| Regions Financial |
| QBE Insurance Group |
Regions Financial and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regions Financial and QBE Insurance
The main advantage of trading using opposite Regions Financial and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regions Financial 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.| Regions Financial vs. Superior Plus Corp | Regions Financial vs. NMI Holdings | Regions Financial vs. Origin Agritech | Regions Financial vs. SIVERS SEMICONDUCTORS AB |
| QBE Insurance vs. Insurance Australia Group | QBE Insurance vs. Superior Plus Corp | QBE Insurance vs. NMI Holdings | QBE Insurance vs. Origin Agritech |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |