Correlation Between Webster Financial and Tradegate
Can any of the company-specific risk be diversified away by investing in both Webster Financial and Tradegate 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 Tradegate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Webster Financial and Tradegate AG Wertpapierhandelsbank, you can compare the effects of market volatilities on Webster Financial and Tradegate 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 Tradegate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and Tradegate.
Diversification Opportunities for Webster Financial and Tradegate
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Webster and Tradegate is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and Tradegate AG Wertpapierhandels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tradegate AG Wertpap 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 Tradegate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tradegate AG Wertpap has no effect on the direction of Webster Financial i.e., Webster Financial and Tradegate go up and down completely randomly.
Pair Corralation between Webster Financial and Tradegate
Assuming the 90 days horizon Webster Financial is expected to generate 13.53 times more return on investment than Tradegate. However, Webster Financial is 13.53 times more volatile than Tradegate AG Wertpapierhandelsbank. It trades about 0.28 of its potential returns per unit of risk. Tradegate AG Wertpapierhandelsbank is currently generating about 0.18 per unit of risk. If you would invest 4,640 in Webster Financial on September 3, 2024 and sell it today you would earn a total of 1,160 from holding Webster Financial or generate 25.0% 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. Tradegate AG Wertpapierhandels
Performance |
| Timeline |
| Webster Financial |
| Tradegate AG Wertpap |
Webster Financial and Tradegate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Webster Financial and Tradegate
The main advantage of trading using opposite Webster Financial and Tradegate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Webster Financial position performs unexpectedly, Tradegate 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 Tradegate will offset losses from the drop in Tradegate's long position.| Webster Financial vs. US Bancorp | Webster Financial vs. The PNC Financial | Webster Financial vs. Fifth Third Bancorp | Webster Financial vs. Regions Financial |
| Tradegate vs. TRADEGATE | Tradegate vs. CARSALESCOM | Tradegate vs. China Resources Beer | Tradegate vs. MARKET VECTR RETAIL |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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