Correlation Between The Hartford and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both The Hartford and Washington Mutual 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 The Hartford and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Hartford Midcap and Washington Mutual Investors, you can compare the effects of market volatilities on The Hartford and Washington Mutual 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 The Hartford with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Hartford and Washington Mutual.
Diversification Opportunities for The Hartford and Washington Mutual
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Washington is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding The Hartford Midcap and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and The Hartford 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 The Hartford Midcap are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of The Hartford i.e., The Hartford and Washington Mutual go up and down completely randomly.
Pair Corralation between The Hartford and Washington Mutual
Assuming the 90 days horizon The Hartford is expected to generate 1.4 times less return on investment than Washington Mutual. In addition to that, The Hartford is 1.49 times more volatile than Washington Mutual Investors. It trades about 0.07 of its total potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.14 per unit of volatility. If you would invest 5,750 in Washington Mutual Investors on September 3, 2024 and sell it today you would earn a total of 853.00 from holding Washington Mutual Investors or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Hartford Midcap vs. Washington Mutual Investors
Performance |
| Timeline |
| Hartford Midcap |
| Washington Mutual |
The Hartford and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Hartford and Washington Mutual
The main advantage of trading using opposite The Hartford and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Hartford position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Wells Fargo Special | The Hartford vs. Mfs Emerging Markets |
| Washington Mutual vs. Ab Small Cap | Washington Mutual vs. Touchstone Small Cap | Washington Mutual vs. Us Small Cap | Washington Mutual vs. Qs Small Capitalization |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |