Correlation Between Washington Mutual and Alger Concentrated
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Alger Concentrated 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 Concentrated 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 Concentrated Equity, you can compare the effects of market volatilities on Washington Mutual and Alger Concentrated 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 Concentrated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Alger Concentrated.
Diversification Opportunities for Washington Mutual and Alger Concentrated
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Alger is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Alger Concentrated Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alger Concentrated Equity 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 Concentrated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alger Concentrated Equity has no effect on the direction of Washington Mutual i.e., Washington Mutual and Alger Concentrated go up and down completely randomly.
Pair Corralation between Washington Mutual and Alger Concentrated
Assuming the 90 days horizon Washington Mutual is expected to generate 2.25 times less return on investment than Alger Concentrated. But when comparing it to its historical volatility, Washington Mutual Investors is 1.85 times less risky than Alger Concentrated. It trades about 0.14 of its potential returns per unit of risk. Alger Concentrated Equity is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,221 in Alger Concentrated Equity on August 31, 2024 and sell it today you would earn a total of 60.00 from holding Alger Concentrated Equity or generate 4.91% 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. Alger Concentrated Equity
Performance |
| Timeline |
| Washington Mutual |
| Alger Concentrated Equity |
Washington Mutual and Alger Concentrated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Alger Concentrated
The main advantage of trading using opposite Washington Mutual and Alger Concentrated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Alger Concentrated 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 Concentrated will offset losses from the drop in Alger Concentrated's long position.| Washington Mutual vs. Aquagold International | Washington Mutual vs. Morningstar Unconstrained Allocation | Washington Mutual vs. Thrivent High Yield | Washington Mutual vs. Via Renewables |
| Alger Concentrated vs. Europacific Growth Fund | Alger Concentrated vs. Washington Mutual Investors | Alger Concentrated vs. Capital World Growth | Alger Concentrated vs. HUMANA INC |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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