Correlation Between Webster Financial and Singapore Reinsurance
Can any of the company-specific risk be diversified away by investing in both Webster Financial and Singapore Reinsurance 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 Singapore Reinsurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and Singapore Reinsurance, you can compare the effects of market volatilities on Webster Financial and Singapore Reinsurance 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 Singapore Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Singapore Reinsurance.
Diversification Opportunities for Webster Financial and Singapore Reinsurance
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Webster and Singapore is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Singapore Reinsurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Reinsurance 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 Singapore Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Reinsurance has no effect on the direction of Webster Financial i.e., Webster Financial and Singapore Reinsurance go up and down completely randomly.
Pair Corralation between Webster Financial and Singapore Reinsurance
Assuming the 90 days horizon Webster Financial is expected to generate 1.16 times more return on investment than Singapore Reinsurance. However, Webster Financial is 1.16 times more volatile than Singapore Reinsurance. It trades about 0.12 of its potential returns per unit of risk. Singapore Reinsurance is currently generating about 0.12 per unit of risk. If you would invest 3,990 in Webster Financial on September 1, 2024 and sell it today you would earn a total of 1,810 from holding Webster Financial or generate 45.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Webster Financial vs. Singapore Reinsurance
Performance |
| Timeline |
| Webster Financial |
| Singapore Reinsurance |
Webster Financial and Singapore Reinsurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Singapore Reinsurance
The main advantage of trading using opposite Webster Financial and Singapore Reinsurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Singapore Reinsurance 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 Singapore Reinsurance will offset losses from the drop in Singapore Reinsurance's long position.| Webster Financial vs. Fifth Third Bancorp | Webster Financial vs. Superior Plus Corp | Webster Financial vs. Origin Agritech | Webster Financial vs. Identiv |
| Singapore Reinsurance vs. SIVERS SEMICONDUCTORS AB | Singapore Reinsurance vs. Darden Restaurants | Singapore Reinsurance vs. Reliance Steel Aluminum | Singapore Reinsurance vs. Q2M Managementberatung AG |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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