Correlation Between VIAPLAY GROUP and Webster Financial

Can any of the company-specific risk be diversified away by investing in both VIAPLAY GROUP and Webster Financial 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 VIAPLAY GROUP and Webster Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VIAPLAY GROUP AB and Webster Financial, you can compare the effects of market volatilities on VIAPLAY GROUP and Webster Financial 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 VIAPLAY GROUP with a short position of Webster Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIAPLAY GROUP and Webster Financial.

Diversification Opportunities for VIAPLAY GROUP and Webster Financial

-0.65

Correlation Coefficient

VIAPLAY GROUP  Webster Financial

Excellent diversification

The 3 months correlation between VIAPLAY and Webster is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB and Webster Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Webster Financial and VIAPLAY GROUP 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 VIAPLAY GROUP AB are associated (or correlated) with Webster Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Webster Financial has no effect on the direction of VIAPLAY GROUP i.e., VIAPLAY GROUP and Webster Financial go up and down completely randomly.

Pair Corralation between VIAPLAY GROUP and Webster Financial

Assuming the 90 days horizon VIAPLAY GROUP AB is expected to under-perform the Webster Financial. In addition to that, VIAPLAY GROUP is 1.39 times more volatile than Webster Financial. It trades about -0.04 of its total potential returns per unit of risk. Webster Financial is currently generating about 0.17 per unit of volatility. If you would invest  4,225  in Webster Financial on September 3, 2024 and sell it today you would earn a total of  1,575  from holding Webster Financial or generate 37.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

VIAPLAY GROUP AB  vs.  Webster Financial

VIAPLAY GROUP AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIAPLAY GROUP AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Webster Financial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Webster Financial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Webster Financial reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIAPLAY GROUP and Webster Financial

The main advantage of trading using opposite VIAPLAY GROUP and Webster Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIAPLAY GROUP position performs unexpectedly, Webster Financial 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 Webster Financial will offset losses from the drop in Webster Financial's long position.

The idea behind VIAPLAY GROUP AB and Webster Financial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.