Correlation Between Washington Mutual and Amg Timessquare
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Amg Timessquare 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 Amg Timessquare 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 Amg Timessquare Small, you can compare the effects of market volatilities on Washington Mutual and Amg Timessquare 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 Amg Timessquare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Amg Timessquare.
Diversification Opportunities for Washington Mutual and Amg Timessquare
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Amg is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Amg Timessquare Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Timessquare Small 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 Amg Timessquare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Timessquare Small has no effect on the direction of Washington Mutual i.e., Washington Mutual and Amg Timessquare go up and down completely randomly.
Pair Corralation between Washington Mutual and Amg Timessquare
Assuming the 90 days horizon Washington Mutual is expected to generate 2.14 times less return on investment than Amg Timessquare. But when comparing it to its historical volatility, Washington Mutual Investors is 2.09 times less risky than Amg Timessquare. It trades about 0.29 of its potential returns per unit of risk. Amg Timessquare Small is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 1,255 in Amg Timessquare Small on September 4, 2024 and sell it today you would earn a total of 116.00 from holding Amg Timessquare Small or generate 9.24% 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. Amg Timessquare Small
Performance |
| Timeline |
| Washington Mutual |
| Amg Timessquare Small |
Washington Mutual and Amg Timessquare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Amg Timessquare
The main advantage of trading using opposite Washington Mutual and Amg Timessquare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Amg Timessquare 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 Amg Timessquare will offset losses from the drop in Amg Timessquare's long position.| Washington Mutual vs. Franklin High Yield | Washington Mutual vs. Limited Term Tax | Washington Mutual vs. Vanguard California Long Term | Washington Mutual vs. Bbh Intermediate Municipal |
| Amg Timessquare vs. Mfs International Growth | Amg Timessquare vs. Amg River Road | Amg Timessquare vs. Aqr Managed Futures | Amg Timessquare vs. Brown Advisory Growth |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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