Correlation Between DAX Index and Webster Financial
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By analyzing existing cross correlation between DAX Index and Webster Financial, you can compare the effects of market volatilities on DAX Index 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 DAX Index with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAX Index and Webster Financial.
Diversification Opportunities for DAX Index and Webster Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAX and Webster is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding DAX Index and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and DAX Index 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 DAX Index 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 DAX Index i.e., DAX Index and Webster Financial go up and down completely randomly.
Pair Corralation between DAX Index and Webster Financial
Assuming the 90 days trading horizon DAX Index is expected to under-perform the Webster Financial. But the index apears to be less risky and, when comparing its historical volatility, DAX Index is 4.34 times less risky than Webster Financial. The index trades about -0.03 of its potential returns per unit of risk. The Webster Financial is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,701 in Webster Financial on August 25, 2024 and sell it today you would earn a total of 949.00 from holding Webster Financial or generate 20.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAX Index vs. Webster Financial
Performance |
| Timeline |
DAX Index and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
DAX Index
Pair trading matchups for DAX Index
Webster Financial
Pair trading matchups for Webster Financial
Pair Trading with DAX Index and Webster Financial
The main advantage of trading using opposite DAX Index and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAX Index 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.| DAX Index vs. Salesforce | DAX Index vs. YATRA ONLINE DL 0001 | DAX Index vs. Ameriprise Financial | DAX Index vs. Mizuho Financial Group |
| Webster Financial vs. Regions Financial | Webster Financial vs. Superior Plus Corp | Webster Financial vs. NMI Holdings | Webster Financial vs. Origin Agritech |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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