Correlation Between Profunds Large and Washington Mutual
Can any of the company-specific risk be diversified away by investing in both Profunds Large 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 Profunds Large and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Profunds Large Cap Growth and Washington Mutual Investors, you can compare the effects of market volatilities on Profunds Large 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 Profunds Large with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Profunds Large and Washington Mutual.
Diversification Opportunities for Profunds Large and Washington Mutual
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Profunds and Washington is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Profunds Large Cap Growth and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Profunds Large 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 Profunds Large Cap Growth 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 Profunds Large i.e., Profunds Large and Washington Mutual go up and down completely randomly.
Pair Corralation between Profunds Large and Washington Mutual
Assuming the 90 days horizon Profunds Large Cap Growth is expected to generate 1.41 times more return on investment than Washington Mutual. However, Profunds Large is 1.41 times more volatile than Washington Mutual Investors. It trades about 0.19 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.21 per unit of risk. If you would invest 3,577 in Profunds Large Cap Growth on June 2, 2025 and sell it today you would earn a total of 341.00 from holding Profunds Large Cap Growth or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Profunds Large Cap Growth vs. Washington Mutual Investors
Performance |
| Timeline |
| Profunds Large Cap |
| Washington Mutual |
Profunds Large and Washington Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Profunds Large and Washington Mutual
The main advantage of trading using opposite Profunds Large and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Profunds Large 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.| Profunds Large vs. Fidelity Capital Income | Profunds Large vs. Janus High Yield Fund | Profunds Large vs. Lord Abbett Short | Profunds Large vs. Pace High Yield |
| Washington Mutual vs. Stone Ridge Diversified | Washington Mutual vs. Jpmorgan Diversified Fund | Washington Mutual vs. Aqr Diversified Arbitrage | Washington Mutual vs. Invesco Diversified Dividend |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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