Correlation Between Washington Mutual and Hexagon AB
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Hexagon AB 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 Hexagon AB 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 Hexagon AB, you can compare the effects of market volatilities on Washington Mutual and Hexagon AB 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 Hexagon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Hexagon AB.
Diversification Opportunities for Washington Mutual and Hexagon AB
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Washington and Hexagon is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Hexagon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexagon AB 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 Hexagon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexagon AB has no effect on the direction of Washington Mutual i.e., Washington Mutual and Hexagon AB go up and down completely randomly.
Pair Corralation between Washington Mutual and Hexagon AB
Assuming the 90 days horizon Washington Mutual is expected to generate 3.99 times less return on investment than Hexagon AB. But when comparing it to its historical volatility, Washington Mutual Investors is 2.05 times less risky than Hexagon AB. It trades about 0.21 of its potential returns per unit of risk. Hexagon AB is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 10,570 in Hexagon AB on October 24, 2024 and sell it today you would earn a total of 1,080 from holding Hexagon AB or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Washington Mutual Investors vs. Hexagon AB
Performance |
| Timeline |
| Washington Mutual |
| Hexagon AB |
Washington Mutual and Hexagon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Hexagon AB
The main advantage of trading using opposite Washington Mutual and Hexagon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Hexagon AB 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 Hexagon AB will offset losses from the drop in Hexagon AB's long position.| Washington Mutual vs. Alphacentric Symmetry Strategy | Washington Mutual vs. Barings Emerging Markets | Washington Mutual vs. Western Assets Emerging | Washington Mutual vs. Catalystmillburn Hedge Strategy |
| Hexagon AB vs. ASSA ABLOY AB | Hexagon AB vs. Sandvik AB | Hexagon AB vs. Investor AB ser | Hexagon AB vs. NIBE Industrier AB |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |