Correlation Between Washington Mutual and SPAR
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and SPAR 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 SPAR 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 SPAR Group, you can compare the effects of market volatilities on Washington Mutual and SPAR 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 SPAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and SPAR.
Diversification Opportunities for Washington Mutual and SPAR
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and SPAR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and SPAR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPAR Group 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 SPAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPAR Group has no effect on the direction of Washington Mutual i.e., Washington Mutual and SPAR go up and down completely randomly.
Pair Corralation between Washington Mutual and SPAR
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.32 times more return on investment than SPAR. However, Washington Mutual Investors is 3.08 times less risky than SPAR. It trades about 0.3 of its potential returns per unit of risk. SPAR Group is currently generating about 0.06 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 | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. SPAR Group
Performance |
| Timeline |
| Washington Mutual |
| SPAR Group |
Washington Mutual and SPAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and SPAR
The main advantage of trading using opposite Washington Mutual and SPAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, SPAR 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 SPAR will offset losses from the drop in SPAR's long position.| Washington Mutual vs. Amg Managers Centersquare | Washington Mutual vs. Tiaa Cref Real Estate | Washington Mutual vs. Deutsche Real Estate | Washington Mutual vs. Tiaa Cref Real Estate |
| SPAR vs. Mitie Group Plc | SPAR vs. Dexterra Group | SPAR vs. Wildpack Beverage | SPAR vs. Intertek Group Plc |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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