Correlation Between Deutsche Enhanced and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Deutsche Enhanced and Washington Mutual 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 Deutsche Enhanced and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Enhanced Modity and Washington Mutual Investors, you can compare the effects of market volatilities on Deutsche Enhanced and Washington Mutual 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 Deutsche Enhanced with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Enhanced and Washington Mutual.
Diversification Opportunities for Deutsche Enhanced and Washington Mutual
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deutsche and Washington is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Enhanced Modity and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Deutsche Enhanced 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 Deutsche Enhanced Modity are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Deutsche Enhanced i.e., Deutsche Enhanced and Washington Mutual go up and down completely randomly.
Pair Corralation between Deutsche Enhanced and Washington Mutual
Assuming the 90 days horizon Deutsche Enhanced Modity is expected to under-perform the Washington Mutual. But the mutual fund apears to be less risky and, when comparing its historical volatility, Deutsche Enhanced Modity is 1.17 times less risky than Washington Mutual. The mutual fund trades about 0.0 of its potential returns per unit of risk. The Washington Mutual Investors is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,687 in Washington Mutual Investors on August 26, 2024 and sell it today you would earn a total of 1,804 from holding Washington Mutual Investors or generate 38.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Enhanced Modity vs. Washington Mutual Investors
Performance |
| Timeline |
| Deutsche Enhanced Modity |
| Washington Mutual |
Deutsche Enhanced and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Enhanced and Washington Mutual
The main advantage of trading using opposite Deutsche Enhanced and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Enhanced position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.| Deutsche Enhanced vs. New World Fund | Deutsche Enhanced vs. Cohen Steers Real | Deutsche Enhanced vs. Europacific Growth Fund | Deutsche Enhanced vs. Deutsche Global Real |
| Washington Mutual vs. Income Fund Of | Washington Mutual vs. New World Fund | Washington Mutual vs. American Mutual Fund | Washington Mutual vs. American Mutual Fund |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| CEOs Directory Screen CEOs from public companies around the world |