Correlation Between Washington Mutual and Bank Mega
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Bank Mega 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 Bank Mega 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 Bank Mega Tbk, you can compare the effects of market volatilities on Washington Mutual and Bank Mega 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 Bank Mega. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Bank Mega.
Diversification Opportunities for Washington Mutual and Bank Mega
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Bank is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Bank Mega Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Mega Tbk 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 Bank Mega. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Mega Tbk has no effect on the direction of Washington Mutual i.e., Washington Mutual and Bank Mega go up and down completely randomly.
Pair Corralation between Washington Mutual and Bank Mega
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.25 times more return on investment than Bank Mega. However, Washington Mutual Investors is 3.96 times less risky than Bank Mega. It trades about 0.25 of its potential returns per unit of risk. Bank Mega Tbk is currently generating about -0.14 per unit of risk. If you would invest 6,196 in Washington Mutual Investors on November 4, 2024 and sell it today you would earn a total of 205.00 from holding Washington Mutual Investors or generate 3.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Bank Mega Tbk
Performance |
| Timeline |
| Washington Mutual |
| Bank Mega Tbk |
Washington Mutual and Bank Mega Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Bank Mega
The main advantage of trading using opposite Washington Mutual and Bank Mega positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Bank Mega 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 Bank Mega will offset losses from the drop in Bank Mega'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 |
| Bank Mega vs. Bank Ocbc Nisp | Bank Mega vs. Bank Mayapada Internasional | Bank Mega vs. Bank Permata Tbk | Bank Mega vs. Bank Pan Indonesia |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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