Correlation Between Webster Financial and Capgemini
Can any of the company-specific risk be diversified away by investing in both Webster Financial and Capgemini 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 Capgemini into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and Capgemini SE, you can compare the effects of market volatilities on Webster Financial and Capgemini 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 Capgemini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Capgemini.
Diversification Opportunities for Webster Financial and Capgemini
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Webster and Capgemini is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Capgemini SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capgemini SE 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 Capgemini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capgemini SE has no effect on the direction of Webster Financial i.e., Webster Financial and Capgemini go up and down completely randomly.
Pair Corralation between Webster Financial and Capgemini
Assuming the 90 days horizon Webster Financial is expected to generate 1.43 times more return on investment than Capgemini. However, Webster Financial is 1.43 times more volatile than Capgemini SE. It trades about 0.06 of its potential returns per unit of risk. Capgemini SE is currently generating about -0.01 per unit of risk. If you would invest 4,264 in Webster Financial on November 5, 2024 and sell it today you would earn a total of 1,486 from holding Webster Financial or generate 34.85% 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. Capgemini SE
Performance |
| Timeline |
| Webster Financial |
| Capgemini SE |
Webster Financial and Capgemini Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Capgemini
The main advantage of trading using opposite Webster Financial and Capgemini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Capgemini 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 Capgemini will offset losses from the drop in Capgemini's long position.| Webster Financial vs. GungHo Online Entertainment | Webster Financial vs. DAIRY FARM INTL | Webster Financial vs. CODERE ONLINE LUX | Webster Financial vs. Federal Agricultural Mortgage |
| Capgemini vs. QUEEN S ROAD | Capgemini vs. CENTURIA OFFICE REIT | Capgemini vs. SAFEROADS HLDGS | Capgemini vs. TEXAS ROADHOUSE |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Positions Ratings 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 | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |