Correlation Between Washington Mutual and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and XLMedia PLC 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 Washington Mutual and XLMedia PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Mutual Investors and XLMedia PLC, you can compare the effects of market volatilities on Washington Mutual and XLMedia PLC 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 Washington Mutual with a short position of XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and XLMedia PLC.
Diversification Opportunities for Washington Mutual and XLMedia PLC
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Washington and XLMedia is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC and Washington Mutual 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 Washington Mutual Investors are associated (or correlated) with XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Washington Mutual i.e., Washington Mutual and XLMedia PLC go up and down completely randomly.
Pair Corralation between Washington Mutual and XLMedia PLC
Assuming the 90 days horizon Washington Mutual Investors is expected to under-perform the XLMedia PLC. But the mutual fund apears to be less risky and, when comparing its historical volatility, Washington Mutual Investors is 7.83 times less risky than XLMedia PLC. The mutual fund trades about -0.05 of its potential returns per unit of risk. The XLMedia PLC is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 14.00 in XLMedia PLC on November 3, 2024 and sell it today you would lose (2.00) from holding XLMedia PLC or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.12% |
| Values | Daily Returns |
Washington Mutual Investors vs. XLMedia PLC
Performance |
| Timeline |
| Washington Mutual |
| XLMedia PLC |
Washington Mutual and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and XLMedia PLC
The main advantage of trading using opposite Washington Mutual and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Washington Mutual vs. Neuberger Berman Real | Washington Mutual vs. Dunham Real Estate | Washington Mutual vs. Real Estate Ultrasector | Washington Mutual vs. Texton Property |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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