Correlation Between Washington Mutual and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Eaton Vance 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 Eaton Vance 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 Eaton Vance Greater, you can compare the effects of market volatilities on Washington Mutual and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Eaton Vance.
Diversification Opportunities for Washington Mutual and Eaton Vance
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Washington and Eaton is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Eaton Vance Greater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Greater 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Greater has no effect on the direction of Washington Mutual i.e., Washington Mutual and Eaton Vance go up and down completely randomly.
Pair Corralation between Washington Mutual and Eaton Vance
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.53 times more return on investment than Eaton Vance. However, Washington Mutual Investors is 1.89 times less risky than Eaton Vance. It trades about 0.25 of its potential returns per unit of risk. Eaton Vance Greater is currently generating about 0.1 per unit of risk. If you would invest 6,196 in Washington Mutual Investors on November 4, 2024 and sell it today you would earn a total of 205.00 from holding Washington Mutual Investors or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Eaton Vance Greater
Performance |
| Timeline |
| Washington Mutual |
| Eaton Vance Greater |
Washington Mutual and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Eaton Vance
The main advantage of trading using opposite Washington Mutual and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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