Correlation Between Washington Mutual and VanEck Intermediate
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and VanEck Intermediate 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 VanEck Intermediate 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 VanEck Intermediate Muni, you can compare the effects of market volatilities on Washington Mutual and VanEck Intermediate 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 VanEck Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and VanEck Intermediate.
Diversification Opportunities for Washington Mutual and VanEck Intermediate
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and VanEck is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and VanEck Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Intermediate Muni 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 VanEck Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Intermediate Muni has no effect on the direction of Washington Mutual i.e., Washington Mutual and VanEck Intermediate go up and down completely randomly.
Pair Corralation between Washington Mutual and VanEck Intermediate
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 2.91 times more return on investment than VanEck Intermediate. However, Washington Mutual is 2.91 times more volatile than VanEck Intermediate Muni. It trades about 0.3 of its potential returns per unit of risk. VanEck Intermediate Muni is currently generating about -0.1 per unit of risk. If you would invest 6,150 in Washington Mutual Investors on November 3, 2024 and sell it today you would earn a total of 251.00 from holding Washington Mutual Investors or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Washington Mutual Investors vs. VanEck Intermediate Muni
Performance |
| Timeline |
| Washington Mutual |
| VanEck Intermediate Muni |
Washington Mutual and VanEck Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and VanEck Intermediate
The main advantage of trading using opposite Washington Mutual and VanEck Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, VanEck Intermediate 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 VanEck Intermediate will offset losses from the drop in VanEck Intermediate'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 |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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