Correlation Between ACAFP and QBE Insurance
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By analyzing existing cross correlation between ACAFP 475 and QBE Insurance Group, you can compare the effects of market volatilities on ACAFP 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 ACAFP with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACAFP and QBE Insurance.
Diversification Opportunities for ACAFP and QBE Insurance
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ACAFP and QBE is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding ACAFP 475 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 ACAFP 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 ACAFP 475 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 ACAFP i.e., ACAFP and QBE Insurance go up and down completely randomly.
Pair Corralation between ACAFP and QBE Insurance
Assuming the 90 days trading horizon ACAFP is expected to generate 3.74 times less return on investment than QBE Insurance. But when comparing it to its historical volatility, ACAFP 475 is 1.06 times less risky than QBE Insurance. It trades about 0.01 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 926.00 in QBE Insurance Group on September 5, 2024 and sell it today you would earn a total of 239.00 from holding QBE Insurance Group or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 41.24% |
| Values | Daily Returns |
ACAFP 475 vs. QBE Insurance Group
Performance |
| Timeline |
| ACAFP 475 |
| QBE Insurance Group |
ACAFP and QBE Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACAFP and QBE Insurance
The main advantage of trading using opposite ACAFP and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACAFP 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.| ACAFP vs. QBE Insurance Group | ACAFP vs. Aspen Insurance Holdings | ACAFP vs. Old Republic International | ACAFP vs. Kinetik 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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