Correlation Between Washington Mutual and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Telenor ASA 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 Telenor ASA 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 Telenor ASA ADR, you can compare the effects of market volatilities on Washington Mutual and Telenor ASA 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 Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Telenor ASA.
Diversification Opportunities for Washington Mutual and Telenor ASA
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and Telenor is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Telenor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA ADR 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 Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA ADR has no effect on the direction of Washington Mutual i.e., Washington Mutual and Telenor ASA go up and down completely randomly.
Pair Corralation between Washington Mutual and Telenor ASA
Assuming the 90 days horizon Washington Mutual is expected to generate 1.96 times less return on investment than Telenor ASA. But when comparing it to its historical volatility, Washington Mutual Investors is 1.52 times less risky than Telenor ASA. It trades about 0.05 of its potential returns per unit of risk. Telenor ASA ADR is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,015 in Telenor ASA ADR on November 3, 2024 and sell it today you would earn a total of 206.00 from holding Telenor ASA ADR or generate 20.3% 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. Telenor ASA ADR
Performance |
| Timeline |
| Washington Mutual |
| Telenor ASA ADR |
Washington Mutual and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Telenor ASA
The main advantage of trading using opposite Washington Mutual and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA'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 |
| Telenor ASA vs. PCCW Limited | Telenor ASA vs. Hellenic Telecommunications Org | Telenor ASA vs. Telefonica SA ADR | Telenor ASA vs. XL Axiata Tbk |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |