Correlation Between BHP and QBE Insurance

Can any of the company-specific risk be diversified away by investing in both BHP 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 BHP and QBE Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between BHP Group and QBE Insurance Group, you can compare the effects of market volatilities on BHP 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 BHP with a short position of QBE Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of BHP and QBE Insurance.

Diversification Opportunities for BHP and QBE Insurance

-0.06

Correlation Coefficient

BHP  QBE Insurance

Good diversification

The 3 months correlation between BHP and QBE is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding BHP Group 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 BHP 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 BHP Group 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 BHP i.e., BHP and QBE Insurance go up and down completely randomly.

Pair Corralation between BHP and QBE Insurance

Assuming the 90 days trading horizon BHP Group is expected to generate 1.49 times more return on investment than QBE Insurance. However, BHP is 1.49 times more volatile than QBE Insurance Group. It trades about 0.12 of its potential returns per unit of risk. QBE Insurance Group is currently generating about 0.11 per unit of risk. If you would invest  3,766  in BHP Group on April 25, 2025 and sell it today you would earn a total of  419.00  from holding BHP Group or generate 11.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BHP Group  vs.  QBE Insurance Group

BHP Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in BHP Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, BHP may actually be approaching a critical reversion point that can send shares even higher in August 2025.

QBE Insurance Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QBE Insurance Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, QBE Insurance may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with BHP and QBE Insurance

The main advantage of trading using opposite BHP and QBE Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BHP 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.

The idea behind BHP Group and QBE Insurance Group 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.

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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.