Correlation Between Washington Mutual and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Mfs Emerging 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 Mfs Emerging 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 Mfs Emerging Markets, you can compare the effects of market volatilities on Washington Mutual and Mfs Emerging 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 Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Mfs Emerging.
Diversification Opportunities for Washington Mutual and Mfs Emerging
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Washington and MFS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets 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 Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Washington Mutual i.e., Washington Mutual and Mfs Emerging go up and down completely randomly.
Pair Corralation between Washington Mutual and Mfs Emerging
Assuming the 90 days horizon Washington Mutual Investors is expected to generate 2.48 times more return on investment than Mfs Emerging. However, Washington Mutual is 2.48 times more volatile than Mfs Emerging Markets. It trades about 0.14 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.15 per unit of risk. If you would invest 5,750 in Washington Mutual Investors on September 3, 2024 and sell it today you would earn a total of 853.00 from holding Washington Mutual Investors or generate 14.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Mfs Emerging Markets
Performance |
| Timeline |
| Washington Mutual |
| Mfs Emerging Markets |
Washington Mutual and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Mfs Emerging
The main advantage of trading using opposite Washington Mutual and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Mfs Emerging 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 Mfs Emerging will offset losses from the drop in Mfs Emerging'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 |
| Mfs Emerging vs. Goldman Sachs Short | Mfs Emerging vs. Global Gold Fund | Mfs Emerging vs. James Balanced Golden | Mfs Emerging vs. Fidelity Advisor Gold |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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