Correlation Between Washington Mutual and Cresco Labs
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Cresco Labs 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 Cresco Labs 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 Cresco Labs, you can compare the effects of market volatilities on Washington Mutual and Cresco Labs 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 Cresco Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Cresco Labs.
Diversification Opportunities for Washington Mutual and Cresco Labs
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Washington and Cresco is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Cresco Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresco Labs 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 Cresco Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresco Labs has no effect on the direction of Washington Mutual i.e., Washington Mutual and Cresco Labs go up and down completely randomly.
Pair Corralation between Washington Mutual and Cresco Labs
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.16 times more return on investment than Cresco Labs. However, Washington Mutual Investors is 6.43 times less risky than Cresco Labs. It trades about 0.3 of its potential returns per unit of risk. Cresco Labs is currently generating about -0.02 per unit of risk. If you would invest 6,150 in Washington Mutual Investors on November 3, 2024 and sell it today you would earn a total of 251.00 from holding Washington Mutual Investors or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Cresco Labs
Performance |
| Timeline |
| Washington Mutual |
| Cresco Labs |
Washington Mutual and Cresco Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Cresco Labs
The main advantage of trading using opposite Washington Mutual and Cresco Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Cresco Labs 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 Cresco Labs will offset losses from the drop in Cresco Labs' long position.| Washington Mutual vs. Amg Managers Centersquare | Washington Mutual vs. Tiaa Cref Real Estate | Washington Mutual vs. Deutsche Real Estate | Washington Mutual vs. Tiaa Cref Real Estate |
| Cresco Labs vs. Verano Holdings Corp | Cresco Labs vs. AYR Strategies Class | Cresco Labs vs. Green Thumb Industries | Cresco Labs vs. Marimed |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |