Correlation Between Gaming and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Gaming and Webster Financial 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 Gaming and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaming and Leisure and Webster Financial, you can compare the effects of market volatilities on Gaming and Webster Financial 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 Gaming with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming and Webster Financial.
Diversification Opportunities for Gaming and Webster Financial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gaming and Webster is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gaming and Leisure and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and Gaming 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 Gaming and Leisure are associated (or correlated) with Webster Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webster Financial has no effect on the direction of Gaming i.e., Gaming and Webster Financial go up and down completely randomly.
Pair Corralation between Gaming and Webster Financial
Assuming the 90 days horizon Gaming is expected to generate 3.94 times less return on investment than Webster Financial. But when comparing it to its historical volatility, Gaming and Leisure is 2.02 times less risky than Webster Financial. It trades about 0.01 of its potential returns per unit of risk. Webster Financial is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,708 in Webster Financial on October 27, 2024 and sell it today you would earn a total of 942.00 from holding Webster Financial or generate 20.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaming and Leisure vs. Webster Financial
Performance |
| Timeline |
| Gaming and Leisure |
| Webster Financial |
Gaming and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaming and Webster Financial
The main advantage of trading using opposite Gaming and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaming position performs unexpectedly, Webster Financial 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 Webster Financial will offset losses from the drop in Webster Financial's long position.| Gaming vs. Scientific Games | Gaming vs. Media and Games | Gaming vs. COSTCO WHOLESALE CDR | Gaming vs. Ross Stores |
| Webster Financial vs. The PNC Financial | Webster Financial vs. Huntington Bancshares Incorporated | Webster Financial vs. Regions Financial | Webster Financial vs. KeyCorp |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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