Correlation Between Webster Financial and PT Bank
Can any of the company-specific risk be diversified away by investing in both Webster Financial and PT Bank 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 PT Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and PT Bank Maybank, you can compare the effects of market volatilities on Webster Financial and PT Bank 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 PT Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and PT Bank.
Diversification Opportunities for Webster Financial and PT Bank
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Webster and BOZA is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and PT Bank Maybank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Bank Maybank 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 PT Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Bank Maybank has no effect on the direction of Webster Financial i.e., Webster Financial and PT Bank go up and down completely randomly.
Pair Corralation between Webster Financial and PT Bank
Assuming the 90 days horizon Webster Financial is expected to generate 1.18 times more return on investment than PT Bank. However, Webster Financial is 1.18 times more volatile than PT Bank Maybank. It trades about 0.22 of its potential returns per unit of risk. PT Bank Maybank is currently generating about -0.08 per unit of risk. If you would invest 4,720 in Webster Financial on August 26, 2024 and sell it today you would earn a total of 930.00 from holding Webster Financial or generate 19.7% 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. PT Bank Maybank
Performance |
| Timeline |
| Webster Financial |
| PT Bank Maybank |
Webster Financial and PT Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and PT Bank
The main advantage of trading using opposite Webster Financial and PT Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, PT Bank 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 PT Bank will offset losses from the drop in PT Bank's long position.| Webster Financial vs. Superior Plus Corp | Webster Financial vs. NMI Holdings | Webster Financial vs. Origin Agritech | Webster Financial vs. SIVERS SEMICONDUCTORS AB |
| PT Bank vs. HDFC Bank Limited | PT Bank vs. PT Bank Central | PT Bank vs. DBS Group Holdings | PT Bank vs. State Bank of |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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