Correlation Between Washington Mutual and IShares ESG
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and IShares ESG 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 IShares ESG 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 iShares ESG MSCI, you can compare the effects of market volatilities on Washington Mutual and IShares ESG 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 IShares ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and IShares ESG.
Diversification Opportunities for Washington Mutual and IShares ESG
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and IShares is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and iShares ESG MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares ESG MSCI 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 IShares ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares ESG MSCI has no effect on the direction of Washington Mutual i.e., Washington Mutual and IShares ESG go up and down completely randomly.
Pair Corralation between Washington Mutual and IShares ESG
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.95 times more return on investment than IShares ESG. However, Washington Mutual Investors is 1.05 times less risky than IShares ESG. It trades about 0.21 of its potential returns per unit of risk. iShares ESG MSCI is currently generating about -0.06 per unit of risk. If you would invest 6,205 in Washington Mutual Investors on October 24, 2024 and sell it today you would earn a total of 173.00 from holding Washington Mutual Investors or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. iShares ESG MSCI
Performance |
| Timeline |
| Washington Mutual |
| iShares ESG MSCI |
Washington Mutual and IShares ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and IShares ESG
The main advantage of trading using opposite Washington Mutual and IShares ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, IShares ESG 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 IShares ESG will offset losses from the drop in IShares ESG'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 |
| IShares ESG vs. iShares ESG MSCI | IShares ESG vs. iShares ESG Advanced | IShares ESG vs. iShares ESG Aware | IShares ESG vs. iShares ESG Advanced |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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