Correlation Between Washington Mutual and Nationwide Investor

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Nationwide Investor 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 Nationwide Investor 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 Nationwide Investor Destinations, you can compare the effects of market volatilities on Washington Mutual and Nationwide Investor 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 Nationwide Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Nationwide Investor.

Diversification Opportunities for Washington Mutual and Nationwide Investor

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Washington and Nationwide is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Nationwide Investor Destinatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Investor 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 Nationwide Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Investor has no effect on the direction of Washington Mutual i.e., Washington Mutual and Nationwide Investor go up and down completely randomly.

Pair Corralation between Washington Mutual and Nationwide Investor

Assuming the 90 days horizon Washington Mutual Investors is expected to under-perform the Nationwide Investor. In addition to that, Washington Mutual is 1.17 times more volatile than Nationwide Investor Destinations. It trades about -0.05 of its total potential returns per unit of risk. Nationwide Investor Destinations is currently generating about 0.17 per unit of volatility. If you would invest  1,074  in Nationwide Investor Destinations on September 13, 2024 and sell it today you would earn a total of  15.00  from holding Nationwide Investor Destinations or generate 1.4% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Washington Mutual Investors  vs.  Nationwide Investor Destinatio

 Performance 
       Timeline  
Washington Mutual 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Washington Mutual Investors are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Washington Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Nationwide Investor 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Investor Destinations are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nationwide Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Washington Mutual and Nationwide Investor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Washington Mutual and Nationwide Investor

The main advantage of trading using opposite Washington Mutual and Nationwide Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Nationwide Investor 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 Nationwide Investor will offset losses from the drop in Nationwide Investor's long position.
The idea behind Washington Mutual Investors and Nationwide Investor Destinations pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Top Crypto Exchanges
Search and analyze digital assets across top global cryptocurrency exchanges
Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Portfolio Anywhere
Track or share privately all of your investments from the convenience of any device