Correlation Between Webster Financial and PICC Property

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

By analyzing existing cross correlation between Webster Financial and PICC Property and, you can compare the effects of market volatilities on Webster Financial and PICC Property 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 PICC Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Webster Financial and PICC Property.

Diversification Opportunities for Webster Financial and PICC Property

0.02

Correlation Coefficient

Webster Financial  PICC Property

Significant diversification

The 3 months correlation between Webster and PICC is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Webster Financial and PICC Property and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICC Property 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 PICC Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICC Property has no effect on the direction of Webster Financial i.e., Webster Financial and PICC Property go up and down completely randomly.

Pair Corralation between Webster Financial and PICC Property

Assuming the 90 days horizon Webster Financial is expected to under-perform the PICC Property. But the stock apears to be less risky and, when comparing its historical volatility, Webster Financial is 1.16 times less risky than PICC Property. The stock trades about -0.09 of its potential returns per unit of risk. The PICC Property and is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  147.00  in PICC Property and on December 20, 2024 and sell it today you would earn a total of  15.00  from holding PICC Property and or generate 10.2% return on investment over 90 days.

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

Webster Financial  vs.  PICC Property and

Webster Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Webster Financial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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.

PICC Property

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PICC Property and are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, PICC Property may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Webster Financial and PICC Property

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

The idea behind Webster Financial and PICC Property and 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.