Correlation Between Ping An and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Webster Financial, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Webster Financial.
Diversification Opportunities for Ping An and Webster Financial
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ping and Webster is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Webster Financial go up and down completely randomly.
Pair Corralation between Ping An and Webster Financial
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Webster Financial. But the stock apears to be less risky and, when comparing its historical volatility, Ping An Insurance is 1.4 times less risky than Webster Financial. The stock trades about -0.05 of its potential returns per unit of risk. The Webster Financial is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 4,760 in Webster Financial on September 1, 2024 and sell it today you would earn a total of 1,090 from holding Webster Financial or generate 22.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Webster Financial
Performance |
| Timeline |
| Ping An Insurance |
| Webster Financial |
Ping An and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Webster Financial
The main advantage of trading using opposite Ping An and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. Meiko Electronics Co | Ping An vs. North American Construction | Ping An vs. Sterling Construction | Ping An vs. UET United Electronic |
| Webster Financial vs. Fifth Third Bancorp | Webster Financial vs. Superior Plus Corp | Webster Financial vs. Origin Agritech | Webster Financial vs. Identiv |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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