Correlation Between Washington Mutual and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and ProShares MSCI 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 ProShares MSCI 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 ProShares MSCI Emerging, you can compare the effects of market volatilities on Washington Mutual and ProShares MSCI 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 ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and ProShares MSCI.
Diversification Opportunities for Washington Mutual and ProShares MSCI
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Washington and ProShares is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and ProShares MSCI Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Emerging 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 ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Emerging has no effect on the direction of Washington Mutual i.e., Washington Mutual and ProShares MSCI go up and down completely randomly.
Pair Corralation between Washington Mutual and ProShares MSCI
Assuming the 90 days horizon Washington Mutual Investors is expected to under-perform the ProShares MSCI. In addition to that, Washington Mutual is 1.28 times more volatile than ProShares MSCI Emerging. It trades about -0.06 of its total potential returns per unit of risk. ProShares MSCI Emerging is currently generating about -0.06 per unit of volatility. If you would invest 4,369 in ProShares MSCI Emerging on November 4, 2024 and sell it today you would lose (95.00) from holding ProShares MSCI Emerging or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. ProShares MSCI Emerging
Performance |
| Timeline |
| Washington Mutual |
| ProShares MSCI Emerging |
Washington Mutual and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and ProShares MSCI
The main advantage of trading using opposite Washington Mutual and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI'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 |
| ProShares MSCI vs. ProShares MSCI EAFE | ProShares MSCI vs. ProShares MSCI Europe | ProShares MSCI vs. ProShares Russell 2000 | ProShares MSCI vs. ProShares SP MidCap |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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