Correlation Between Washington Mutual and Jensen Portfolio
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Jensen Portfolio 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 Jensen Portfolio 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 Jensen Portfolio, you can compare the effects of market volatilities on Washington Mutual and Jensen Portfolio 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 Jensen Portfolio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Jensen Portfolio.
Diversification Opportunities for Washington Mutual and Jensen Portfolio
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Washington and Jensen is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and The Jensen Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jensen Portfolio 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 Jensen Portfolio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jensen Portfolio has no effect on the direction of Washington Mutual i.e., Washington Mutual and Jensen Portfolio go up and down completely randomly.
Pair Corralation between Washington Mutual and Jensen Portfolio
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.29 times more return on investment than Jensen Portfolio. However, Washington Mutual Investors is 3.43 times less risky than Jensen Portfolio. It trades about 0.31 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about -0.12 per unit of risk. If you would invest 6,325 in Washington Mutual Investors on September 3, 2024 and sell it today you would earn a total of 278.00 from holding Washington Mutual Investors or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. The Jensen Portfolio
Performance |
| Timeline |
| Washington Mutual |
| Jensen Portfolio |
Washington Mutual and Jensen Portfolio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Jensen Portfolio
The main advantage of trading using opposite Washington Mutual and Jensen Portfolio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Jensen Portfolio 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 Jensen Portfolio will offset losses from the drop in Jensen Portfolio's long position.| Washington Mutual vs. Ab Small Cap | Washington Mutual vs. Touchstone Small Cap | Washington Mutual vs. Us Small Cap | Washington Mutual vs. Qs Small Capitalization |
| Jensen Portfolio vs. Bond Fund Of | Jensen Portfolio vs. Washington Mutual Investors | Jensen Portfolio vs. John Hancock Disciplined | Jensen Portfolio vs. Europacific Growth 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |