Correlation Between Europacific Growth and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Washington Mutual 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 Europacific Growth and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Washington Mutual Investors, you can compare the effects of market volatilities on Europacific Growth and Washington Mutual 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 Europacific Growth with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Washington Mutual.
Diversification Opportunities for Europacific Growth and Washington Mutual
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Europacific and Washington is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Washington Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Washington Mutual has no effect on the direction of Europacific Growth i.e., Europacific Growth and Washington Mutual go up and down completely randomly.
Pair Corralation between Europacific Growth and Washington Mutual
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 1.12 times more return on investment than Washington Mutual. However, Europacific Growth is 1.12 times more volatile than Washington Mutual Investors. It trades about 0.48 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.39 per unit of risk. If you would invest 5,655 in Europacific Growth Fund on February 21, 2024 and sell it today you would earn a total of 382.00 from holding Europacific Growth Fund or generate 6.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Europacific Growth Fund vs. Washington Mutual Investors
Performance |
Timeline |
Europacific Growth |
Washington Mutual |
Europacific Growth and Washington Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Europacific Growth and Washington Mutual
The main advantage of trading using opposite Europacific Growth and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Washington Mutual 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 Washington Mutual will offset losses from the drop in Washington Mutual's long position.Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund | Europacific Growth vs. Europacific Growth Fund |
Washington Mutual vs. Vanguard Total Stock | Washington Mutual vs. Vanguard Total Stock | Washington Mutual vs. Vanguard 500 Index | Washington Mutual vs. Vanguard Institutional Index |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Stocks Directory Find actively traded stocks across global markets | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |