Correlation Between Webster Financial and BANK RAKYAT
Can any of the company-specific risk be diversified away by investing in both Webster Financial and BANK RAKYAT 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 BANK RAKYAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and BANK RAKYAT IND, you can compare the effects of market volatilities on Webster Financial and BANK RAKYAT 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 BANK RAKYAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and BANK RAKYAT.
Diversification Opportunities for Webster Financial and BANK RAKYAT
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Webster and BANK is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and BANK RAKYAT IND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK RAKYAT IND 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 BANK RAKYAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK RAKYAT IND has no effect on the direction of Webster Financial i.e., Webster Financial and BANK RAKYAT go up and down completely randomly.
Pair Corralation between Webster Financial and BANK RAKYAT
Assuming the 90 days horizon Webster Financial is expected to generate 0.9 times more return on investment than BANK RAKYAT. However, Webster Financial is 1.12 times less risky than BANK RAKYAT. It trades about 0.02 of its potential returns per unit of risk. BANK RAKYAT IND is currently generating about 0.0 per unit of risk. If you would invest 4,802 in Webster Financial on October 30, 2024 and sell it today you would earn a total of 698.00 from holding Webster Financial or generate 14.54% 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. BANK RAKYAT IND
Performance |
| Timeline |
| Webster Financial |
| BANK RAKYAT IND |
Webster Financial and BANK RAKYAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and BANK RAKYAT
The main advantage of trading using opposite Webster Financial and BANK RAKYAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, BANK RAKYAT 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 BANK RAKYAT will offset losses from the drop in BANK RAKYAT's long position.| Webster Financial vs. SPARTAN STORES | Webster Financial vs. CENTURIA OFFICE REIT | Webster Financial vs. The Home Depot | Webster Financial vs. Geely Automobile Holdings |
| BANK RAKYAT vs. UNITED UTILITIES GR | BANK RAKYAT vs. Amkor Technology | BANK RAKYAT vs. Wayside Technology Group | BANK RAKYAT vs. Magnachip Semiconductor |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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