Correlation Between Washington Mutual and Franklin Growth
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Franklin Growth 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 Franklin Growth 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 Franklin Growth Allocation, you can compare the effects of market volatilities on Washington Mutual and Franklin Growth 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 Franklin Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Franklin Growth.
Diversification Opportunities for Washington Mutual and Franklin Growth
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Washington and Franklin is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Franklin Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Growth Allo 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 Franklin Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Growth Allo has no effect on the direction of Washington Mutual i.e., Washington Mutual and Franklin Growth go up and down completely randomly.
Pair Corralation between Washington Mutual and Franklin Growth
Assuming the 90 days horizon Washington Mutual is expected to generate 1.08 times less return on investment than Franklin Growth. In addition to that, Washington Mutual is 1.63 times more volatile than Franklin Growth Allocation. It trades about 0.06 of its total potential returns per unit of risk. Franklin Growth Allocation is currently generating about 0.1 per unit of volatility. If you would invest 1,494 in Franklin Growth Allocation on September 14, 2024 and sell it today you would earn a total of 513.00 from holding Franklin Growth Allocation or generate 34.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Franklin Growth Allocation
Performance |
| Timeline |
| Washington Mutual |
| Franklin Growth Allo |
Washington Mutual and Franklin Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Franklin Growth
The main advantage of trading using opposite Washington Mutual and Franklin Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Franklin Growth 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 Franklin Growth will offset losses from the drop in Franklin Growth's long position.| Washington Mutual vs. Growth Fund Of | Washington Mutual vs. Europacific Growth Fund | Washington Mutual vs. Smallcap World Fund | Washington Mutual vs. Investment Of America |
| Franklin Growth vs. T Rowe Price | Franklin Growth vs. Fm Investments Large | Franklin Growth vs. Washington Mutual Investors | Franklin Growth vs. T Rowe Price |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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