Correlation Between Washington Mutual and Know Labs
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Know Labs 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 Know Labs 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 Know Labs, you can compare the effects of market volatilities on Washington Mutual and Know Labs 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 Know Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Know Labs.
Diversification Opportunities for Washington Mutual and Know Labs
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Know is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Know Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Know Labs 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 Know Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Know Labs has no effect on the direction of Washington Mutual i.e., Washington Mutual and Know Labs go up and down completely randomly.
Pair Corralation between Washington Mutual and Know Labs
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.07 times more return on investment than Know Labs. However, Washington Mutual Investors is 14.23 times less risky than Know Labs. It trades about 0.29 of its potential returns per unit of risk. Know Labs is currently generating about -0.43 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. Know Labs
Performance |
| Timeline |
| Washington Mutual |
| Know Labs |
Washington Mutual and Know Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Know Labs
The main advantage of trading using opposite Washington Mutual and Know Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Know Labs 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 Know Labs will offset losses from the drop in Know Labs' 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 |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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