Correlation Between Washington Mutual and Federated Mdt
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Federated Mdt 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 Federated Mdt 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 Federated Mdt Large, you can compare the effects of market volatilities on Washington Mutual and Federated Mdt 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 Federated Mdt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Federated Mdt.
Diversification Opportunities for Washington Mutual and Federated Mdt
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Federated is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Federated Mdt Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Mdt Large 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 Federated Mdt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Mdt Large has no effect on the direction of Washington Mutual i.e., Washington Mutual and Federated Mdt go up and down completely randomly.
Pair Corralation between Washington Mutual and Federated Mdt
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.67 times more return on investment than Federated Mdt. However, Washington Mutual Investors is 1.5 times less risky than Federated Mdt. It trades about 0.21 of its potential returns per unit of risk. Federated Mdt Large is currently generating about 0.04 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. Federated Mdt Large
Performance |
| Timeline |
| Washington Mutual |
| Federated Mdt Large |
Washington Mutual and Federated Mdt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Federated Mdt
The main advantage of trading using opposite Washington Mutual and Federated Mdt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Federated Mdt 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 Federated Mdt will offset losses from the drop in Federated Mdt'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 |
| Federated Mdt vs. T Rowe Price | Federated Mdt vs. Gmo High Yield | Federated Mdt vs. Morningstar Defensive Bond | Federated Mdt vs. Bbh Intermediate Municipal |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |