Correlation Between Webster Financial and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both Webster Financial and SBI Insurance 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 SBI Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and SBI Insurance Group, you can compare the effects of market volatilities on Webster Financial and SBI Insurance 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and SBI Insurance.
Diversification Opportunities for Webster Financial and SBI Insurance
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Webster and SBI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of Webster Financial i.e., Webster Financial and SBI Insurance go up and down completely randomly.
Pair Corralation between Webster Financial and SBI Insurance
Assuming the 90 days horizon Webster Financial is expected to generate 2.86 times more return on investment than SBI Insurance. However, Webster Financial is 2.86 times more volatile than SBI Insurance Group. It trades about 0.23 of its potential returns per unit of risk. SBI Insurance Group is currently generating about 0.3 per unit of risk. If you would invest 4,681 in Webster Financial on August 27, 2024 and sell it today you would earn a total of 969.00 from holding Webster Financial or generate 20.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. SBI Insurance Group
Performance |
| Timeline |
| Webster Financial |
| SBI Insurance Group |
Webster Financial and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and SBI Insurance
The main advantage of trading using opposite Webster Financial and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, SBI Insurance 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| Webster Financial vs. Platinum Investment Management | Webster Financial vs. Sporttotal AG | Webster Financial vs. BII Railway Transportation | Webster Financial vs. SPORTING |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |