Correlation Between Washington Mutual and Fortune Indonesia
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Fortune Indonesia 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 Fortune Indonesia 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 Fortune Indonesia Tbk, you can compare the effects of market volatilities on Washington Mutual and Fortune Indonesia 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 Fortune Indonesia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Fortune Indonesia.
Diversification Opportunities for Washington Mutual and Fortune Indonesia
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Fortune is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Fortune Indonesia Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Indonesia Tbk 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 Fortune Indonesia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Indonesia Tbk has no effect on the direction of Washington Mutual i.e., Washington Mutual and Fortune Indonesia go up and down completely randomly.
Pair Corralation between Washington Mutual and Fortune Indonesia
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.09 times more return on investment than Fortune Indonesia. However, Washington Mutual Investors is 10.79 times less risky than Fortune Indonesia. It trades about 0.13 of its potential returns per unit of risk. Fortune Indonesia Tbk is currently generating about -0.04 per unit of risk. If you would invest 6,205 in Washington Mutual Investors on October 22, 2024 and sell it today you would earn a total of 96.00 from holding Washington Mutual Investors or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Washington Mutual Investors vs. Fortune Indonesia Tbk
Performance |
| Timeline |
| Washington Mutual |
| Fortune Indonesia Tbk |
Washington Mutual and Fortune Indonesia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Fortune Indonesia
The main advantage of trading using opposite Washington Mutual and Fortune Indonesia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Fortune Indonesia 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 Fortune Indonesia will offset losses from the drop in Fortune Indonesia's long position.| Washington Mutual vs. Qs Large Cap | Washington Mutual vs. Fpddjx | Washington Mutual vs. Wmcanx | Washington Mutual vs. Fa 529 Aggressive |
| Fortune Indonesia vs. Gema Grahasarana Tbk | Fortune Indonesia vs. Bayu Buana Tbk | Fortune Indonesia vs. Fast Food Indonesia | Fortune Indonesia vs. Mahaka Media Tbk |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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