Correlation Between Webster Financial and JSC Halyk
Can any of the company-specific risk be diversified away by investing in both Webster Financial and JSC Halyk 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 JSC Halyk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and JSC Halyk bank, you can compare the effects of market volatilities on Webster Financial and JSC Halyk 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 JSC Halyk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and JSC Halyk.
Diversification Opportunities for Webster Financial and JSC Halyk
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Webster and JSC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and JSC Halyk bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JSC Halyk bank 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 JSC Halyk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JSC Halyk bank has no effect on the direction of Webster Financial i.e., Webster Financial and JSC Halyk go up and down completely randomly.
Pair Corralation between Webster Financial and JSC Halyk
Assuming the 90 days horizon Webster Financial is expected to generate 0.68 times more return on investment than JSC Halyk. However, Webster Financial is 1.46 times less risky than JSC Halyk. It trades about 0.29 of its potential returns per unit of risk. JSC Halyk bank is currently generating about 0.07 per unit of risk. If you would invest 5,300 in Webster Financial on October 25, 2024 and sell it today you would earn a total of 500.00 from holding Webster Financial or generate 9.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. JSC Halyk bank
Performance |
| Timeline |
| Webster Financial |
| JSC Halyk bank |
Webster Financial and JSC Halyk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and JSC Halyk
The main advantage of trading using opposite Webster Financial and JSC Halyk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, JSC Halyk 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 JSC Halyk will offset losses from the drop in JSC Halyk's long position.| Webster Financial vs. Tower Semiconductor | Webster Financial vs. Fast Retailing Co | Webster Financial vs. PICKN PAY STORES | Webster Financial vs. H2O Retailing |
| JSC Halyk vs. Entravision Communications | JSC Halyk vs. BII Railway Transportation | JSC Halyk vs. Yuexiu Transport Infrastructure | JSC Halyk vs. Chengdu PUTIAN Telecommunications |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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