Correlation Between Washington Mutual and Simt Multi
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Simt Multi 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 Simt Multi 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 Simt Multi Asset Inflation, you can compare the effects of market volatilities on Washington Mutual and Simt Multi 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 Simt Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Simt Multi.
Diversification Opportunities for Washington Mutual and Simt Multi
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Washington and Simt is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Simt Multi Asset Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Multi Asset 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 Simt Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Multi Asset has no effect on the direction of Washington Mutual i.e., Washington Mutual and Simt Multi go up and down completely randomly.
Pair Corralation between Washington Mutual and Simt Multi
Assuming the 90 days horizon Washington Mutual Investors is expected to under-perform the Simt Multi. In addition to that, Washington Mutual is 6.01 times more volatile than Simt Multi Asset Inflation. It trades about -0.2 of its total potential returns per unit of risk. Simt Multi Asset Inflation is currently generating about -0.29 per unit of volatility. If you would invest 800.00 in Simt Multi Asset Inflation on September 26, 2024 and sell it today you would lose (11.00) from holding Simt Multi Asset Inflation or give up 1.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Washington Mutual Investors vs. Simt Multi Asset Inflation
Performance |
Timeline |
Washington Mutual |
Simt Multi Asset |
Washington Mutual and Simt Multi Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Washington Mutual and Simt Multi
The main advantage of trading using opposite Washington Mutual and Simt Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Simt Multi 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 Simt Multi will offset losses from the drop in Simt Multi'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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