Correlation Between Washington Mutual and Artisan Thematic
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Artisan Thematic 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 Artisan Thematic 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 Artisan Thematic Fund, you can compare the effects of market volatilities on Washington Mutual and Artisan Thematic 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 Artisan Thematic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Artisan Thematic.
Diversification Opportunities for Washington Mutual and Artisan Thematic
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Artisan is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Artisan Thematic Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Artisan Thematic 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 Artisan Thematic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Artisan Thematic has no effect on the direction of Washington Mutual i.e., Washington Mutual and Artisan Thematic go up and down completely randomly.
Pair Corralation between Washington Mutual and Artisan Thematic
Assuming the 90 days horizon Washington Mutual is expected to generate 2.31 times less return on investment than Artisan Thematic. But when comparing it to its historical volatility, Washington Mutual Investors is 1.43 times less risky than Artisan Thematic. It trades about 0.12 of its potential returns per unit of risk. Artisan Thematic Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,404 in Artisan Thematic Fund on August 28, 2024 and sell it today you would earn a total of 109.00 from holding Artisan Thematic Fund or generate 4.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Artisan Thematic Fund
Performance |
| Timeline |
| Washington Mutual |
| Artisan Thematic |
Washington Mutual and Artisan Thematic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Artisan Thematic
The main advantage of trading using opposite Washington Mutual and Artisan Thematic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Artisan Thematic 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 Artisan Thematic will offset losses from the drop in Artisan Thematic's long position.| Washington Mutual vs. John Hancock Government | Washington Mutual vs. Invesco Government Fund | Washington Mutual vs. Dunham Porategovernment Bond | Washington Mutual vs. Fidelity Series Government |
| Artisan Thematic vs. John Hancock Financial | Artisan Thematic vs. Vanguard Financials Index | Artisan Thematic vs. Gabelli Global Financial | Artisan Thematic vs. Prudential Jennison Financial |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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