Correlation Between Webster Financial and Münchener Rück
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By analyzing existing cross correlation between Webster Financial and Mnchener Rck AG, you can compare the effects of market volatilities on Webster Financial and Münchener Rück 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 Münchener Rück. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Münchener Rück.
Diversification Opportunities for Webster Financial and Münchener Rück
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Webster and Münchener is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Mnchener Rck AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mnchener Rck AG 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 Münchener Rück. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mnchener Rck AG has no effect on the direction of Webster Financial i.e., Webster Financial and Münchener Rück go up and down completely randomly.
Pair Corralation between Webster Financial and Münchener Rück
Assuming the 90 days horizon Webster Financial is expected to generate 4.86 times more return on investment than Münchener Rück. However, Webster Financial is 4.86 times more volatile than Mnchener Rck AG. It trades about 0.25 of its potential returns per unit of risk. Mnchener Rck AG is currently generating about 0.28 per unit of risk. If you would invest 4,700 in Webster Financial on September 2, 2024 and sell it today you would earn a total of 1,100 from holding Webster Financial or generate 23.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. Mnchener Rck AG
Performance |
| Timeline |
| Webster Financial |
| Mnchener Rck AG |
Webster Financial and Münchener Rück Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Münchener Rück
The main advantage of trading using opposite Webster Financial and Münchener Rück positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Münchener Rück 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 Münchener Rück will offset losses from the drop in Münchener Rück's long position.| Webster Financial vs. Playa Hotels Resorts | Webster Financial vs. FIREWEED METALS P | Webster Financial vs. Hyatt Hotels | Webster Financial vs. HYATT HOTELS A |
| Münchener Rück vs. GAMESTOP | Münchener Rück vs. United Rentals | Münchener Rück vs. QINGCI GAMES INC | Münchener Rück vs. OURGAME INTHOLDL 00005 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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