Correlation Between Washington Mutual and Touchstone Focused
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Touchstone Focused 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 Touchstone Focused 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 Touchstone Focused Fund, you can compare the effects of market volatilities on Washington Mutual and Touchstone Focused 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 Touchstone Focused. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Touchstone Focused.
Diversification Opportunities for Washington Mutual and Touchstone Focused
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Washington and TOUCHSTONE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Touchstone Focused Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Touchstone Focused 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 Touchstone Focused. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Touchstone Focused has no effect on the direction of Washington Mutual i.e., Washington Mutual and Touchstone Focused go up and down completely randomly.
Pair Corralation between Washington Mutual and Touchstone Focused
Assuming the 90 days horizon Washington Mutual is expected to generate 1.11 times less return on investment than Touchstone Focused. But when comparing it to its historical volatility, Washington Mutual Investors is 1.17 times less risky than Touchstone Focused. It trades about 0.29 of its potential returns per unit of risk. Touchstone Focused Fund is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 7,289 in Touchstone Focused Fund on November 3, 2024 and sell it today you would earn a total of 331.00 from holding Touchstone Focused Fund or generate 4.54% 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. Touchstone Focused Fund
Performance |
| Timeline |
| Washington Mutual |
| Touchstone Focused |
Washington Mutual and Touchstone Focused Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Touchstone Focused
The main advantage of trading using opposite Washington Mutual and Touchstone Focused positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Touchstone Focused 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 Touchstone Focused will offset losses from the drop in Touchstone Focused'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 |
| Touchstone Focused vs. Lgm Risk Managed | Touchstone Focused vs. Rbc Bluebay Global | Touchstone Focused vs. Ironclad Managed Risk | Touchstone Focused vs. Pace High Yield |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |