Correlation Between Washington Mutual and Mainstay Growth
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Mainstay Growth 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 Mainstay Growth 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 Mainstay Growth Allocation, you can compare the effects of market volatilities on Washington Mutual and Mainstay Growth 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 Mainstay Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Mainstay Growth.
Diversification Opportunities for Washington Mutual and Mainstay Growth
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Washington and Mainstay is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Mainstay Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Growth Allo 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 Mainstay Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Growth Allo has no effect on the direction of Washington Mutual i.e., Washington Mutual and Mainstay Growth go up and down completely randomly.
Pair Corralation between Washington Mutual and Mainstay Growth
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.9 times more return on investment than Mainstay Growth. However, Washington Mutual Investors is 1.12 times less risky than Mainstay Growth. It trades about 0.29 of its potential returns per unit of risk. Mainstay Growth Allocation is currently generating about 0.23 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Mainstay Growth Allocation
Performance |
| Timeline |
| Washington Mutual |
| Mainstay Growth Allo |
Washington Mutual and Mainstay Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Mainstay Growth
The main advantage of trading using opposite Washington Mutual and Mainstay Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Mainstay Growth 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 Mainstay Growth will offset losses from the drop in Mainstay Growth'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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