Correlation Between Alstria Office and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Alstria Office 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 Alstria Office and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between alstria office REIT AG and Webster Financial, you can compare the effects of market volatilities on Alstria Office 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 Alstria Office with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alstria Office and Webster Financial.
Diversification Opportunities for Alstria Office and Webster Financial
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alstria and Webster is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding alstria office REIT AG and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and Alstria Office 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 alstria office REIT AG 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 Alstria Office i.e., Alstria Office and Webster Financial go up and down completely randomly.
Pair Corralation between Alstria Office and Webster Financial
Assuming the 90 days horizon Alstria Office is expected to generate 1.99 times less return on investment than Webster Financial. In addition to that, Alstria Office is 1.26 times more volatile than Webster Financial. It trades about 0.01 of its total potential returns per unit of risk. Webster Financial is currently generating about 0.04 per unit of volatility. If you would invest 3,921 in Webster Financial on October 13, 2024 and sell it today you would earn a total of 1,429 from holding Webster Financial or generate 36.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
alstria office REIT AG vs. Webster Financial
Performance |
| Timeline |
| alstria office REIT |
| Webster Financial |
Alstria Office and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alstria Office and Webster Financial
The main advantage of trading using opposite Alstria Office and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alstria Office 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.| Alstria Office vs. Webster Financial | Alstria Office vs. United Insurance Holdings | Alstria Office vs. Osisko Metals | Alstria Office vs. JD SPORTS FASH |
| Webster Financial vs. YATRA ONLINE DL 0001 | Webster Financial vs. Lamar Advertising | Webster Financial vs. TITAN MACHINERY | Webster Financial vs. Hanison Construction 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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