Correlation Between Invesco Us and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Invesco Us and Washington Mutual 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 Invesco Us and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Government Fund and Washington Mutual Investors, you can compare the effects of market volatilities on Invesco Us and Washington Mutual 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 Invesco Us with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Us and Washington Mutual.
Diversification Opportunities for Invesco Us and Washington Mutual
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and Washington is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Government Fund and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Invesco Us 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 Invesco Government Fund are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Invesco Us i.e., Invesco Us and Washington Mutual go up and down completely randomly.
Pair Corralation between Invesco Us and Washington Mutual
Assuming the 90 days horizon Invesco Us is expected to generate 7.4 times less return on investment than Washington Mutual. But when comparing it to its historical volatility, Invesco Government Fund is 4.98 times less risky than Washington Mutual. It trades about 0.09 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,250 in Washington Mutual Investors on August 31, 2024 and sell it today you would earn a total of 336.00 from holding Washington Mutual Investors or generate 5.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Government Fund vs. Washington Mutual Investors
Performance |
| Timeline |
| Invesco Government |
| Washington Mutual |
Invesco Us and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Us and Washington Mutual
The main advantage of trading using opposite Invesco Us and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Us position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.| Invesco Us vs. Invesco Real Estate | Invesco Us vs. Invesco Municipal Income | Invesco Us vs. Invesco Municipal Income | Invesco Us vs. Invesco Municipal Income |
| Washington Mutual vs. Aquagold International | Washington Mutual vs. Morningstar Unconstrained Allocation | Washington Mutual vs. Thrivent High Yield | Washington Mutual vs. Via Renewables |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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