Correlation Between Washington Mutual and Alger Spectra
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Alger Spectra 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 Alger Spectra 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 Alger Spectra Fund, you can compare the effects of market volatilities on Washington Mutual and Alger Spectra 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 Alger Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Alger Spectra.
Diversification Opportunities for Washington Mutual and Alger Spectra
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Washington and ALGER is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Alger Spectra Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Spectra 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 Alger Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Spectra has no effect on the direction of Washington Mutual i.e., Washington Mutual and Alger Spectra go up and down completely randomly.
Pair Corralation between Washington Mutual and Alger Spectra
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.41 times more return on investment than Alger Spectra. However, Washington Mutual Investors is 2.44 times less risky than Alger Spectra. It trades about 0.03 of its potential returns per unit of risk. Alger Spectra Fund is currently generating about -0.15 per unit of risk. If you would invest 6,379 in Washington Mutual Investors on November 29, 2024 and sell it today you would earn a total of 18.00 from holding Washington Mutual Investors or generate 0.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Alger Spectra Fund
Performance |
| Timeline |
| Washington Mutual |
| Alger Spectra |
Washington Mutual and Alger Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Alger Spectra
The main advantage of trading using opposite Washington Mutual and Alger Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Alger Spectra 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 Alger Spectra will offset losses from the drop in Alger Spectra's long position.| Washington Mutual vs. Blackrock Large Cap | Washington Mutual vs. Lord Abbett Affiliated | Washington Mutual vs. Vest Large Cap | Washington Mutual vs. Tax Managed Large Cap |
| Alger Spectra vs. American Mutual Fund | Alger Spectra vs. Vest Large Cap | Alger Spectra vs. M Large Cap | Alger Spectra vs. Lord Abbett Affiliated |
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 Stocks Directory module to find actively traded stocks across global markets.
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