Correlation Between Washington Mutual and The Hartford
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and The Hartford 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 The Hartford 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 The Hartford Growth, you can compare the effects of market volatilities on Washington Mutual and The Hartford 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 The Hartford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and The Hartford.
Diversification Opportunities for Washington Mutual and The Hartford
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and The is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and The Hartford Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Growth 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 The Hartford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Growth has no effect on the direction of Washington Mutual i.e., Washington Mutual and The Hartford go up and down completely randomly.
Pair Corralation between Washington Mutual and The Hartford
Assuming the 90 days horizon Washington Mutual is expected to generate 1.51 times less return on investment than The Hartford. But when comparing it to its historical volatility, Washington Mutual Investors is 1.84 times less risky than The Hartford. It trades about 0.13 of its potential returns per unit of risk. The Hartford Growth is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,705 in The Hartford Growth on August 31, 2024 and sell it today you would earn a total of 2,148 from holding The Hartford Growth or generate 57.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.73% |
| Values | Daily Returns |
Washington Mutual Investors vs. The Hartford Growth
Performance |
| Timeline |
| Washington Mutual |
| Hartford Growth |
Washington Mutual and The Hartford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and The Hartford
The main advantage of trading using opposite Washington Mutual and The Hartford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, The Hartford 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 The Hartford will offset losses from the drop in The Hartford'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 |
| The Hartford vs. Europacific Growth Fund | The Hartford vs. Washington Mutual Investors | The Hartford vs. Capital World Growth | The Hartford 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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