Correlation Between PNC Financial and Webster Financial
Can any of the company-specific risk be diversified away by investing in both PNC Financial 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 PNC Financial and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The PNC Financial and Webster Financial, you can compare the effects of market volatilities on PNC Financial 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 PNC Financial with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of PNC Financial and Webster Financial.
Diversification Opportunities for PNC Financial and Webster Financial
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between PNC and Webster is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding The PNC Financial and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and PNC Financial 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 The PNC Financial 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 PNC Financial i.e., PNC Financial and Webster Financial go up and down completely randomly.
Pair Corralation between PNC Financial and Webster Financial
Assuming the 90 days horizon PNC Financial is expected to generate 1.17 times less return on investment than Webster Financial. But when comparing it to its historical volatility, The PNC Financial is 1.68 times less risky than Webster Financial. It trades about 0.32 of its potential returns per unit of risk. 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 | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The PNC Financial vs. Webster Financial
Performance |
| Timeline |
| PNC Financial |
| Webster Financial |
PNC Financial and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PNC Financial and Webster Financial
The main advantage of trading using opposite PNC Financial and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PNC Financial 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.| PNC Financial vs. Regions Financial | PNC Financial vs. Superior Plus Corp | PNC Financial vs. NMI Holdings | PNC Financial vs. Origin Agritech |
| 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |