Correlation Between Washington Mutual and KABE Group
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and KABE Group 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 KABE Group 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 KABE Group AB, you can compare the effects of market volatilities on Washington Mutual and KABE Group 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 KABE Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and KABE Group.
Diversification Opportunities for Washington Mutual and KABE Group
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Washington and KABE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and KABE Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KABE Group 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 KABE Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KABE Group AB has no effect on the direction of Washington Mutual i.e., Washington Mutual and KABE Group go up and down completely randomly.
Pair Corralation between Washington Mutual and KABE Group
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.45 times more return on investment than KABE Group. However, Washington Mutual Investors is 2.24 times less risky than KABE Group. It trades about 0.29 of its potential returns per unit of risk. KABE Group AB is currently generating about 0.01 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 Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Washington Mutual Investors vs. KABE Group AB
Performance |
| Timeline |
| Washington Mutual |
| KABE Group AB |
Washington Mutual and KABE Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and KABE Group
The main advantage of trading using opposite Washington Mutual and KABE Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, KABE Group 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 KABE Group will offset losses from the drop in KABE Group'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 |
| KABE Group vs. Byggmax Group AB | KABE Group vs. Svedbergs i Dalstorp | KABE Group vs. Inwido AB | KABE Group vs. New Wave Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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