Correlation Between Webster Financial and Hancock Whitney
Can any of the company-specific risk be diversified away by investing in both Webster Financial and Hancock Whitney 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 Webster Financial and Hancock Whitney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and Hancock Whitney Corp, you can compare the effects of market volatilities on Webster Financial and Hancock Whitney 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 Webster Financial with a short position of Hancock Whitney. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Hancock Whitney.
Diversification Opportunities for Webster Financial and Hancock Whitney
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Webster and Hancock is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Hancock Whitney Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hancock Whitney Corp and Webster 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 Webster Financial are associated (or correlated) with Hancock Whitney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hancock Whitney Corp has no effect on the direction of Webster Financial i.e., Webster Financial and Hancock Whitney go up and down completely randomly.
Pair Corralation between Webster Financial and Hancock Whitney
Assuming the 90 days trading horizon Webster Financial is expected to generate 1.8 times less return on investment than Hancock Whitney. But when comparing it to its historical volatility, Webster Financial is 2.06 times less risky than Hancock Whitney. It trades about 0.08 of its potential returns per unit of risk. Hancock Whitney Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,383 in Hancock Whitney Corp on September 4, 2024 and sell it today you would earn a total of 1,569 from holding Hancock Whitney Corp or generate 35.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. Hancock Whitney Corp
Performance |
| Timeline |
| Webster Financial |
| Hancock Whitney Corp |
Webster Financial and Hancock Whitney Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Hancock Whitney
The main advantage of trading using opposite Webster Financial and Hancock Whitney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Hancock Whitney 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 Hancock Whitney will offset losses from the drop in Hancock Whitney's long position.| Webster Financial vs. KeyCorp | Webster Financial vs. Regions Financial | Webster Financial vs. US Bancorp | Webster Financial vs. KeyCorp |
| Hancock Whitney vs. International Bancshares | Hancock Whitney vs. Finward Bancorp | Hancock Whitney vs. Aquagold International | Hancock Whitney vs. Thrivent High Yield |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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