Correlation Between Webster Financial and Ping An
Can any of the company-specific risk be diversified away by investing in both Webster Financial and Ping An 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 Ping An into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and Ping An Insurance, you can compare the effects of market volatilities on Webster Financial and Ping An 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 Ping An. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Ping An.
Diversification Opportunities for Webster Financial and Ping An
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Webster and Ping is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Ping An Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ping An Insurance 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 Ping An. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ping An Insurance has no effect on the direction of Webster Financial i.e., Webster Financial and Ping An go up and down completely randomly.
Pair Corralation between Webster Financial and Ping An
Assuming the 90 days horizon Webster Financial is expected to generate 1.4 times more return on investment than Ping An. However, Webster Financial is 1.4 times more volatile than Ping An Insurance. It trades about 0.25 of its potential returns per unit of risk. Ping An Insurance is currently generating about -0.05 per unit of risk. If you would invest 4,760 in Webster Financial on September 1, 2024 and sell it today you would earn a total of 1,090 from holding Webster Financial or generate 22.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. Ping An Insurance
Performance |
| Timeline |
| Webster Financial |
| Ping An Insurance |
Webster Financial and Ping An Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Ping An
The main advantage of trading using opposite Webster Financial and Ping An positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Ping An 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 Ping An will offset losses from the drop in Ping An's long position.| Webster Financial vs. Fifth Third Bancorp | Webster Financial vs. Superior Plus Corp | Webster Financial vs. Origin Agritech | Webster Financial vs. Identiv |
| Ping An vs. Meiko Electronics Co | Ping An vs. North American Construction | Ping An vs. Sterling Construction | Ping An vs. UET United Electronic |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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