Correlation Between MAG SILVER and Webster Financial
Can any of the company-specific risk be diversified away by investing in both MAG SILVER 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 MAG SILVER and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAG SILVER and Webster Financial, you can compare the effects of market volatilities on MAG SILVER 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 MAG SILVER with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAG SILVER and Webster Financial.
Diversification Opportunities for MAG SILVER and Webster Financial
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MAG and Webster is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding MAG SILVER and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and MAG SILVER 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 MAG SILVER 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 MAG SILVER i.e., MAG SILVER and Webster Financial go up and down completely randomly.
Pair Corralation between MAG SILVER and Webster Financial
Assuming the 90 days trading horizon MAG SILVER is expected to generate 1.07 times more return on investment than Webster Financial. However, MAG SILVER is 1.07 times more volatile than Webster Financial. It trades about 0.03 of its potential returns per unit of risk. Webster Financial is currently generating about 0.03 per unit of risk. If you would invest 1,181 in MAG SILVER on November 7, 2024 and sell it today you would earn a total of 359.00 from holding MAG SILVER or generate 30.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAG SILVER vs. Webster Financial
Performance |
| Timeline |
| MAG SILVER |
| Webster Financial |
MAG SILVER and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAG SILVER and Webster Financial
The main advantage of trading using opposite MAG SILVER and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAG SILVER 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.| MAG SILVER vs. SIVERS SEMICONDUCTORS AB | MAG SILVER vs. NorAm Drilling AS | MAG SILVER vs. Volkswagen AG | MAG SILVER vs. Darden Restaurants |
| Webster Financial vs. Suntory Beverage Food | Webster Financial vs. Thai Beverage Public | Webster Financial vs. Fevertree Drinks PLC | Webster Financial vs. Molson Coors Beverage |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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