Correlation Between Washington Mutual and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and JLEN Environmental 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 JLEN Environmental 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 JLEN Environmental Assets, you can compare the effects of market volatilities on Washington Mutual and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and JLEN Environmental.
Diversification Opportunities for Washington Mutual and JLEN Environmental
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Washington and JLEN is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Washington Mutual i.e., Washington Mutual and JLEN Environmental go up and down completely randomly.
Pair Corralation between Washington Mutual and JLEN Environmental
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.41 times more return on investment than JLEN Environmental. However, Washington Mutual Investors is 2.42 times less risky than JLEN Environmental. It trades about 0.3 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.29 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 | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Washington Mutual Investors vs. JLEN Environmental Assets
Performance |
| Timeline |
| Washington Mutual |
| JLEN Environmental Assets |
Washington Mutual and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and JLEN Environmental
The main advantage of trading using opposite Washington Mutual and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental'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 |
| JLEN Environmental vs. InterContinental Hotels Group | JLEN Environmental vs. URU Metals | JLEN Environmental vs. Eastinco Mining Exploration | JLEN Environmental vs. Cornish Metals |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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