Correlation Between Webster Financial and ANGI Homeservices
Can any of the company-specific risk be diversified away by investing in both Webster Financial and ANGI Homeservices 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 ANGI Homeservices into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and ANGI Homeservices, you can compare the effects of market volatilities on Webster Financial and ANGI Homeservices 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 ANGI Homeservices. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and ANGI Homeservices.
Diversification Opportunities for Webster Financial and ANGI Homeservices
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Webster and ANGI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and ANGI Homeservices in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANGI Homeservices 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 ANGI Homeservices. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANGI Homeservices has no effect on the direction of Webster Financial i.e., Webster Financial and ANGI Homeservices go up and down completely randomly.
Pair Corralation between Webster Financial and ANGI Homeservices
Assuming the 90 days horizon Webster Financial is expected to generate 0.58 times more return on investment than ANGI Homeservices. However, Webster Financial is 1.74 times less risky than ANGI Homeservices. It trades about 0.03 of its potential returns per unit of risk. ANGI Homeservices is currently generating about 0.01 per unit of risk. If you would invest 4,386 in Webster Financial on November 27, 2024 and sell it today you would earn a total of 914.00 from holding Webster Financial or generate 20.84% 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. ANGI Homeservices
Performance |
| Timeline |
| Webster Financial |
| ANGI Homeservices |
Webster Financial and ANGI Homeservices Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and ANGI Homeservices
The main advantage of trading using opposite Webster Financial and ANGI Homeservices positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, ANGI Homeservices 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 ANGI Homeservices will offset losses from the drop in ANGI Homeservices' long position.| Webster Financial vs. Keck Seng Investments | Webster Financial vs. New Residential Investment | Webster Financial vs. Marie Brizard Wine | Webster Financial vs. SLR Investment Corp |
| ANGI Homeservices vs. DELTA AIR LINES | ANGI Homeservices vs. Alaska Air Group | ANGI Homeservices vs. Wizz Air Holdings | ANGI Homeservices vs. SILICON LABORATOR |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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