Correlation Between Webster Financial and Bloom Energy
Can any of the company-specific risk be diversified away by investing in both Webster Financial and Bloom Energy 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 Bloom Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and Bloom Energy, you can compare the effects of market volatilities on Webster Financial and Bloom Energy 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 Bloom Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Bloom Energy.
Diversification Opportunities for Webster Financial and Bloom Energy
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Webster and Bloom is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Bloom Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloom Energy 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 Bloom Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloom Energy has no effect on the direction of Webster Financial i.e., Webster Financial and Bloom Energy go up and down completely randomly.
Pair Corralation between Webster Financial and Bloom Energy
Assuming the 90 days horizon Webster Financial is expected to generate 2.77 times less return on investment than Bloom Energy. But when comparing it to its historical volatility, Webster Financial is 2.14 times less risky than Bloom Energy. It trades about 0.19 of its potential returns per unit of risk. Bloom Energy is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,276 in Bloom Energy on October 26, 2024 and sell it today you would earn a total of 424.00 from holding Bloom Energy or generate 18.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. Bloom Energy
Performance |
| Timeline |
| Webster Financial |
| Bloom Energy |
Webster Financial and Bloom Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Bloom Energy
The main advantage of trading using opposite Webster Financial and Bloom Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Bloom Energy 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 Bloom Energy will offset losses from the drop in Bloom Energy's long position.| Webster Financial vs. Axfood AB | Webster Financial vs. AOI Electronics Co | Webster Financial vs. STORE ELECTRONIC | Webster Financial vs. SENECA FOODS A |
| Bloom Energy vs. ecotel communication ag | Bloom Energy vs. Webster Financial | Bloom Energy vs. Chiba Bank | Bloom Energy vs. Virtu Financial |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |