Correlation Between Washington Mutual and Large Capital
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Large Capital 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 Large Capital 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 Large Capital Growth, you can compare the effects of market volatilities on Washington Mutual and Large Capital 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 Large Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Large Capital.
Diversification Opportunities for Washington Mutual and Large Capital
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Large is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Large Capital Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Capital 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 Large Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Capital Growth has no effect on the direction of Washington Mutual i.e., Washington Mutual and Large Capital go up and down completely randomly.
Pair Corralation between Washington Mutual and Large Capital
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.92 times more return on investment than Large Capital. However, Washington Mutual Investors is 1.08 times less risky than Large Capital. It trades about 0.12 of its potential returns per unit of risk. Large Capital Growth is currently generating about 0.07 per unit of risk. If you would invest 6,456 in Washington Mutual Investors on August 27, 2024 and sell it today you would earn a total of 125.00 from holding Washington Mutual Investors or generate 1.94% 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. Large Capital Growth
Performance |
| Timeline |
| Washington Mutual |
| Large Capital Growth |
Washington Mutual and Large Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Large Capital
The main advantage of trading using opposite Washington Mutual and Large Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Large Capital 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 Large Capital will offset losses from the drop in Large Capital'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 |
| Large Capital vs. Mid Cap Index | Large Capital vs. Mid Cap Strategic | Large Capital vs. Valic Company I | Large Capital vs. Valic Company I |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |