Correlation Between Washington Mutual and Vanguard Total
Can any of the company-specific risk be diversified away by investing in both Washington Mutual and Vanguard Total 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 Vanguard Total 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 Vanguard Total Stock, you can compare the effects of market volatilities on Washington Mutual and Vanguard Total 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 Vanguard Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Washington Mutual and Vanguard Total.
Diversification Opportunities for Washington Mutual and Vanguard Total
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Washington and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Washington Mutual Investors and Vanguard Total Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Stock 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 Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Stock has no effect on the direction of Washington Mutual i.e., Washington Mutual and Vanguard Total go up and down completely randomly.
Pair Corralation between Washington Mutual and Vanguard Total
Assuming the 90 days horizon Washington Mutual is expected to generate 1.21 times less return on investment than Vanguard Total. But when comparing it to its historical volatility, Washington Mutual Investors is 1.24 times less risky than Vanguard Total. It trades about 0.04 of its potential returns per unit of risk. Vanguard Total Stock is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 9,883 in Vanguard Total Stock on January 17, 2024 and sell it today you would earn a total of 2,276 from holding Vanguard Total Stock or generate 23.03% 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. Vanguard Total Stock
Performance |
| Timeline |
| Washington Mutual |
| Vanguard Total Stock |
Washington Mutual and Vanguard Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Washington Mutual and Vanguard Total
The main advantage of trading using opposite Washington Mutual and Vanguard Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Washington Mutual position performs unexpectedly, Vanguard Total 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 Vanguard Total will offset losses from the drop in Vanguard Total's long position.| Washington Mutual vs. American Mutual Fund | Washington Mutual vs. American Mutual Fund | Washington Mutual vs. American Funds Income | Washington Mutual vs. American Funds Preservation |
| Vanguard Total vs. Vanguard Global Esg | Vanguard Total vs. Vanguard ESG Stock | Vanguard Total vs. Vanguard Mid Cap Value | Vanguard Total vs. Vanguard Dividend Appreciation |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |