Correlation Between Washington Mutual and Hawaii Municipal
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Hawaii Municipal 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 Hawaii Municipal 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 Hawaii Municipal Bond, you can compare the effects of market volatilities on Washington Mutual and Hawaii Municipal 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 Hawaii Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Hawaii Municipal.
Diversification Opportunities for Washington Mutual and Hawaii Municipal
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Hawaii is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Hawaii Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaii Municipal Bond 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 Hawaii Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaii Municipal Bond has no effect on the direction of Washington Mutual i.e., Washington Mutual and Hawaii Municipal go up and down completely randomly.
Pair Corralation between Washington Mutual and Hawaii Municipal
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 5.47 times more return on investment than Hawaii Municipal. However, Washington Mutual is 5.47 times more volatile than Hawaii Municipal Bond. It trades about 0.05 of its potential returns per unit of risk. Hawaii Municipal Bond is currently generating about 0.05 per unit of risk. If you would invest 5,817 in Washington Mutual Investors on November 3, 2024 and sell it today you would earn a total of 584.00 from holding Washington Mutual Investors or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Hawaii Municipal Bond
Performance |
| Timeline |
| Washington Mutual |
| Hawaii Municipal Bond |
Washington Mutual and Hawaii Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Hawaii Municipal
The main advantage of trading using opposite Washington Mutual and Hawaii Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Hawaii Municipal 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 Hawaii Municipal will offset losses from the drop in Hawaii Municipal'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 |
| Hawaii Municipal vs. Hawaii Municipal Bond | Hawaii Municipal vs. Mndvux | Hawaii Municipal vs. Prudential Jennison International | Hawaii Municipal vs. Fidelity New Markets |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |