Correlation Between Singapore Reinsurance and Webster Financial
Can any of the company-specific risk be diversified away by investing in both Singapore Reinsurance 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 Singapore Reinsurance and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Reinsurance and Webster Financial, you can compare the effects of market volatilities on Singapore Reinsurance 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 Singapore Reinsurance with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Reinsurance and Webster Financial.
Diversification Opportunities for Singapore Reinsurance and Webster Financial
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Singapore and Webster is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Reinsurance and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and Singapore Reinsurance 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 Singapore Reinsurance 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 Singapore Reinsurance i.e., Singapore Reinsurance and Webster Financial go up and down completely randomly.
Pair Corralation between Singapore Reinsurance and Webster Financial
Assuming the 90 days trading horizon Singapore Reinsurance is expected to generate 2.07 times less return on investment than Webster Financial. In addition to that, Singapore Reinsurance is 1.21 times more volatile than Webster Financial. It trades about 0.02 of its total potential returns per unit of risk. Webster Financial is currently generating about 0.04 per unit of volatility. If you would invest 4,124 in Webster Financial on August 30, 2024 and sell it today you would earn a total of 1,776 from holding Webster Financial or generate 43.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Reinsurance vs. Webster Financial
Performance |
| Timeline |
| Singapore Reinsurance |
| Webster Financial |
Singapore Reinsurance and Webster Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Reinsurance and Webster Financial
The main advantage of trading using opposite Singapore Reinsurance and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Reinsurance 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.| Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Apple Inc | Singapore Reinsurance vs. Superior Plus Corp | Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB |
| Webster Financial vs. SYSTEMAIR AB | Webster Financial vs. Magic Software Enterprises | Webster Financial vs. WIZZ AIR HLDGUNSPADR4 | Webster Financial vs. Westinghouse Air Brake |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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