Correlation Between US Physical and QBE Insurance
Can any of the company-specific risk be diversified away by investing in both US Physical 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 US Physical and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Physical Therapy and QBE Insurance Group, you can compare the effects of market volatilities on US Physical 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 US Physical with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Physical and QBE Insurance.
Diversification Opportunities for US Physical and QBE Insurance
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between UPH and QBE is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding US Physical Therapy 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 US Physical 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 US Physical Therapy 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 US Physical i.e., US Physical and QBE Insurance go up and down completely randomly.
Pair Corralation between US Physical and QBE Insurance
Assuming the 90 days horizon US Physical Therapy is expected to under-perform the QBE Insurance. In addition to that, US Physical is 1.01 times more volatile than QBE Insurance Group. It trades about -0.13 of its total potential returns per unit of risk. QBE Insurance Group is currently generating about 0.17 per unit of volatility. If you would invest 1,150 in QBE Insurance Group on October 24, 2024 and sell it today you would earn a total of 40.00 from holding QBE Insurance Group or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Physical Therapy vs. QBE Insurance Group
Performance |
| Timeline |
| US Physical Therapy |
| QBE Insurance Group |
US Physical and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Physical and QBE Insurance
The main advantage of trading using opposite US Physical and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Physical 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.| US Physical vs. HCA Healthcare | US Physical vs. HCA Healthcare | US Physical vs. FRESENIUS SECO ADR | US Physical vs. Fresenius SE Co |
| QBE Insurance vs. Tokyu Construction Co | QBE Insurance vs. DAIRY FARM INTL | QBE Insurance vs. Titan Machinery | QBE Insurance vs. CarsalesCom |
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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