Correlation Between Washington Mutual and IShares Currency
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and IShares Currency 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 IShares Currency 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 iShares Currency Hedged, you can compare the effects of market volatilities on Washington Mutual and IShares Currency 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 IShares Currency. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and IShares Currency.
Diversification Opportunities for Washington Mutual and IShares Currency
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Washington and IShares is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and iShares Currency Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Currency Hedged 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 IShares Currency. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Currency Hedged has no effect on the direction of Washington Mutual i.e., Washington Mutual and IShares Currency go up and down completely randomly.
Pair Corralation between Washington Mutual and IShares Currency
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 1.17 times more return on investment than IShares Currency. However, Washington Mutual is 1.17 times more volatile than iShares Currency Hedged. It trades about 0.25 of its potential returns per unit of risk. iShares Currency Hedged is currently generating about 0.24 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. iShares Currency Hedged
Performance |
| Timeline |
| Washington Mutual |
| iShares Currency Hedged |
Washington Mutual and IShares Currency Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and IShares Currency
The main advantage of trading using opposite Washington Mutual and IShares Currency positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, IShares Currency 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 IShares Currency will offset losses from the drop in IShares Currency'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 |
| IShares Currency vs. iShares Currency Hedged | IShares Currency vs. iShares Currency Hedged | IShares Currency vs. iShares MSCI Intl | IShares Currency vs. iShares Currency Hedged |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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