Correlation Between Washington Mutual and The Jensen
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and The Jensen 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 Jensen 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 The Jensen 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 Jensen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and The Jensen.
Diversification Opportunities for Washington Mutual and The Jensen
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Washington and The is -0.07. 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 The Jensen. 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 The Jensen go up and down completely randomly.
Pair Corralation between Washington Mutual and The Jensen
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 0.33 times more return on investment than The Jensen. However, Washington Mutual Investors is 3.03 times less risky than The Jensen. It trades about 0.05 of its potential returns per unit of risk. The Jensen Portfolio is currently generating about -0.17 per unit of risk. If you would invest 6,437 in Washington Mutual Investors on August 25, 2024 and sell it today you would earn a total of 54.00 from holding Washington Mutual Investors or generate 0.84% 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 The Jensen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and The Jensen
The main advantage of trading using opposite Washington Mutual and The Jensen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, The Jensen 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 Jensen will offset losses from the drop in The Jensen's long position.| Washington Mutual vs. Income Fund Of | Washington Mutual vs. New World Fund | Washington Mutual vs. American Mutual Fund | Washington Mutual vs. American Mutual Fund |
| The Jensen vs. Bond Fund Of | The Jensen vs. Washington Mutual Investors | The Jensen vs. John Hancock Disciplined | The Jensen 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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