Correlation Between MT Bank and Webster Financial
Can any of the company-specific risk be diversified away by investing in both MT Bank 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 MT Bank and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MT Bank and Webster Financial, you can compare the effects of market volatilities on MT Bank 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 MT Bank with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MT Bank and Webster Financial.
Diversification Opportunities for MT Bank and Webster Financial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MTB-PH and Webster is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MT Bank and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and MT Bank 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 MT Bank 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 MT Bank i.e., MT Bank and Webster Financial go up and down completely randomly.
Pair Corralation between MT Bank and Webster Financial
If you would invest 2,110 in Webster Financial on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Webster Financial or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
MT Bank vs. Webster Financial
Performance |
| Timeline |
| MT Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| Webster Financial |
MT Bank and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MT Bank and Webster Financial
The main advantage of trading using opposite MT Bank and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MT Bank 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.The idea behind MT Bank and Webster Financial 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.| Webster Financial vs. KeyCorp | Webster Financial vs. Associated Banc Corp | Webster Financial vs. New York Community | Webster Financial vs. Synovus Financial Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |