Correlation Between Washington Mutual and Clipper Fund
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Clipper Fund 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 Clipper Fund 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 Clipper Fund Inc, you can compare the effects of market volatilities on Washington Mutual and Clipper Fund 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 Clipper Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Clipper Fund.
Diversification Opportunities for Washington Mutual and Clipper Fund
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Washington and Clipper is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Clipper Fund Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clipper Fund 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 Clipper Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clipper Fund has no effect on the direction of Washington Mutual i.e., Washington Mutual and Clipper Fund go up and down completely randomly.
Pair Corralation between Washington Mutual and Clipper Fund
Assuming the 90 days horizon Washington Mutual is expected to generate 1.8 times less return on investment than Clipper Fund. But when comparing it to its historical volatility, Washington Mutual Investors is 1.3 times less risky than Clipper Fund. It trades about 0.07 of its potential returns per unit of risk. Clipper Fund Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,457 in Clipper Fund Inc on August 19, 2025 and sell it today you would earn a total of 65.00 from holding Clipper Fund Inc or generate 4.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Washington Mutual Investors vs. Clipper Fund Inc
Performance |
| Timeline |
| Washington Mutual |
| Clipper Fund |
Washington Mutual and Clipper Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Clipper Fund
The main advantage of trading using opposite Washington Mutual and Clipper Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Clipper Fund 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 Clipper Fund will offset losses from the drop in Clipper Fund's long position.| Washington Mutual vs. Washington Mutual Investors | Washington Mutual vs. Washington Mutual Investors | Washington Mutual vs. Washington Mutual Investors | Washington Mutual vs. Capital World Growth |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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