Correlation Between Washington Mutual and Ab Select
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Ab Select 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 Ab Select 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 Ab Select Equity, you can compare the effects of market volatilities on Washington Mutual and Ab Select 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 Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Ab Select.
Diversification Opportunities for Washington Mutual and Ab Select
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Washington and AUUIX is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Ab Select Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Equity 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 Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Equity has no effect on the direction of Washington Mutual i.e., Washington Mutual and Ab Select go up and down completely randomly.
Pair Corralation between Washington Mutual and Ab Select
Assuming the 90 days horizon Washington Mutual is expected to generate 1.38 times less return on investment than Ab Select. But when comparing it to its historical volatility, Washington Mutual Investors is 1.04 times less risky than Ab Select. It trades about 0.19 of its potential returns per unit of risk. Ab Select Equity is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 2,247 in Ab Select Equity on June 7, 2025 and sell it today you would earn a total of 204.00 from holding Ab Select Equity or generate 9.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Ab Select Equity
Performance |
| Timeline |
| Washington Mutual |
| Ab Select Equity |
Washington Mutual and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Ab Select
The main advantage of trading using opposite Washington Mutual and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Washington Mutual vs. Income Fund Of | Washington Mutual vs. New World Fund | Washington Mutual vs. American Mutual Fund | Washington Mutual vs. American Mutual Fund |
| Ab Select vs. Ab Global E | Ab Select vs. Ab Global E | Ab Select vs. Ab Global E | Ab Select vs. Ab All Market |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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