Correlation Between REGAL HOTEL and Webster Financial
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL 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 REGAL HOTEL and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL HOTEL INTL and Webster Financial, you can compare the effects of market volatilities on REGAL HOTEL 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 REGAL HOTEL with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and Webster Financial.
Diversification Opportunities for REGAL HOTEL and Webster Financial
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REGAL and Webster is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and REGAL HOTEL 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 REGAL HOTEL INTL 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 REGAL HOTEL i.e., REGAL HOTEL and Webster Financial go up and down completely randomly.
Pair Corralation between REGAL HOTEL and Webster Financial
Assuming the 90 days trading horizon REGAL HOTEL is expected to generate 5.5 times less return on investment than Webster Financial. But when comparing it to its historical volatility, REGAL HOTEL INTL is 1.01 times less risky than Webster Financial. It trades about 0.02 of its potential returns per unit of risk. Webster Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,833 in Webster Financial on September 2, 2024 and sell it today you would earn a total of 1,967 from holding Webster Financial or generate 51.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. Webster Financial
Performance |
| Timeline |
| REGAL HOTEL INTL |
| Webster Financial |
REGAL HOTEL and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and Webster Financial
The main advantage of trading using opposite REGAL HOTEL and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL 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.| REGAL HOTEL vs. SIVERS SEMICONDUCTORS AB | REGAL HOTEL vs. Darden Restaurants | REGAL HOTEL vs. Reliance Steel Aluminum | REGAL HOTEL vs. Q2M Managementberatung AG |
| Webster Financial vs. Playa Hotels Resorts | Webster Financial vs. FIREWEED METALS P | Webster Financial vs. Hyatt Hotels | Webster Financial vs. HYATT HOTELS A |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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