Correlation Between Washington Mutual and Franchise
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Franchise 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 Franchise 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 Franchise Group, you can compare the effects of market volatilities on Washington Mutual and Franchise 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 Franchise. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Franchise.
Diversification Opportunities for Washington Mutual and Franchise
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Washington and Franchise is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Franchise Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franchise Group 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 Franchise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franchise Group has no effect on the direction of Washington Mutual i.e., Washington Mutual and Franchise go up and down completely randomly.
Pair Corralation between Washington Mutual and Franchise
If you would invest 5,863 in Washington Mutual Investors on November 3, 2024 and sell it today you would earn a total of 538.00 from holding Washington Mutual Investors or generate 9.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.81% |
| Values | Daily Returns |
Washington Mutual Investors vs. Franchise Group
Performance |
| Timeline |
| Washington Mutual |
| Franchise Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Washington Mutual and Franchise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Franchise
The main advantage of trading using opposite Washington Mutual and Franchise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Franchise 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 Franchise will offset losses from the drop in Franchise's 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 |
| Franchise vs. Mega Uranium | Franchise vs. Laramide Resources | Franchise vs. NXG NextGen Infrastructure | Franchise vs. Pinetree Capital |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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