Correlation Between Washington Federal and TriMas
Can any of the company-specific risk be diversified away by investing in both Washington Federal and TriMas 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 Federal and TriMas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Washington Federal and TriMas, you can compare the effects of market volatilities on Washington Federal and TriMas 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 Federal with a short position of TriMas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Federal and TriMas.
Diversification Opportunities for Washington Federal and TriMas
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Washington and TriMas is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Washington Federal and TriMas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TriMas and Washington Federal 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 Federal are associated (or correlated) with TriMas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TriMas has no effect on the direction of Washington Federal i.e., Washington Federal and TriMas go up and down completely randomly.
Pair Corralation between Washington Federal and TriMas
Given the investment horizon of 90 days Washington Federal is expected to under-perform the TriMas. But the stock apears to be less risky and, when comparing its historical volatility, Washington Federal is 1.42 times less risky than TriMas. The stock trades about -0.05 of its potential returns per unit of risk. The TriMas is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 3,053 in TriMas on July 20, 2025 and sell it today you would earn a total of 636.00 from holding TriMas or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Federal vs. TriMas
Performance |
| Timeline |
| Washington Federal |
| TriMas |
Washington Federal and TriMas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Federal and TriMas
The main advantage of trading using opposite Washington Federal and TriMas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Federal position performs unexpectedly, TriMas 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 TriMas will offset losses from the drop in TriMas' long position.| Washington Federal vs. Trustmark | Washington Federal vs. First Financial Bancorp | Washington Federal vs. Banner | Washington Federal vs. Enterprise Financial Services |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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