Correlation Between Ab Select and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Ab Select 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 Ab Select and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Washington Mutual Investors, you can compare the effects of market volatilities on Ab Select 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 Ab Select with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Washington Mutual.
Diversification Opportunities for Ab Select and Washington Mutual
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between AUUIX and Washington is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Ab Select 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 Ab Select Equity 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 Ab Select i.e., Ab Select and Washington Mutual go up and down completely randomly.
Pair Corralation between Ab Select and Washington Mutual
Assuming the 90 days horizon Ab Select Equity is expected to generate 1.08 times more return on investment than Washington Mutual. However, Ab Select is 1.08 times more volatile than Washington Mutual Investors. It trades about 0.33 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.27 per unit of risk. If you would invest 2,289 in Ab Select Equity on September 2, 2024 and sell it today you would earn a total of 121.00 from holding Ab Select Equity or generate 5.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Washington Mutual Investors
Performance |
| Timeline |
| Ab Select Equity |
| Washington Mutual |
Ab Select and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Washington Mutual
The main advantage of trading using opposite Ab Select and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select 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.| Ab Select vs. Oppenheimer International Diversified | Ab Select vs. Tax Managed Mid Small | Ab Select vs. Davenport Small Cap | Ab Select vs. Small Cap Stock |
| Washington Mutual vs. Shelton Funds | Washington Mutual vs. Volumetric Fund Volumetric | Washington Mutual vs. Growth Opportunities Fund | Washington Mutual vs. Qs Growth Fund |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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