Correlation Between Webster Financial and PATTIES FOODS
Can any of the company-specific risk be diversified away by investing in both Webster Financial and PATTIES FOODS 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 PATTIES FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and PATTIES FOODS , you can compare the effects of market volatilities on Webster Financial and PATTIES FOODS 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 PATTIES FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and PATTIES FOODS.
Diversification Opportunities for Webster Financial and PATTIES FOODS
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Webster and PATTIES is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and PATTIES FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATTIES FOODS 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 PATTIES FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATTIES FOODS has no effect on the direction of Webster Financial i.e., Webster Financial and PATTIES FOODS go up and down completely randomly.
Pair Corralation between Webster Financial and PATTIES FOODS
Assuming the 90 days horizon Webster Financial is expected to generate 0.47 times more return on investment than PATTIES FOODS. However, Webster Financial is 2.14 times less risky than PATTIES FOODS. It trades about 0.02 of its potential returns per unit of risk. PATTIES FOODS 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 Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Webster Financial vs. PATTIES FOODS
Performance |
| Timeline |
| Webster Financial |
| PATTIES FOODS |
Webster Financial and PATTIES FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and PATTIES FOODS
The main advantage of trading using opposite Webster Financial and PATTIES FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, PATTIES FOODS 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 PATTIES FOODS will offset losses from the drop in PATTIES FOODS'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 |
| PATTIES FOODS vs. Eisai Co | PATTIES FOODS vs. Teva Pharmaceutical Industries | PATTIES FOODS vs. Ipsen SA | PATTIES FOODS vs. Dr Reddys Laboratories |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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