Correlation Between Ivy Natural and Washington Mutual

Can any of the company-specific risk be diversified away by investing in both Ivy Natural 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 Ivy Natural and Washington Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ivy Natural Resources and Washington Mutual Investors, you can compare the effects of market volatilities on Ivy Natural 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 Ivy Natural with a short position of Washington Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ivy Natural and Washington Mutual.

Diversification Opportunities for Ivy Natural and Washington Mutual

0.79

Correlation Coefficient

Ivy Natural  Washington Mutual

Poor diversification

The 3 months correlation between Ivy and Washington is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ivy Natural Resources and Washington Mutual Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Washington Mutual and Ivy Natural 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 Ivy Natural Resources 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 Ivy Natural i.e., Ivy Natural and Washington Mutual go up and down completely randomly.

Pair Corralation between Ivy Natural and Washington Mutual

Assuming the 90 days horizon Ivy Natural Resources is expected to generate 1.4 times more return on investment than Washington Mutual. However, Ivy Natural is 1.4 times more volatile than Washington Mutual Investors. It trades about 0.17 of its potential returns per unit of risk. Washington Mutual Investors is currently generating about 0.22 per unit of risk. If you would invest  1,485  in Ivy Natural Resources on May 6, 2025 and sell it today you would earn a total of  141.00  from holding Ivy Natural Resources or generate 9.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Ivy Natural Resources  vs.  Washington Mutual Investors

Ivy Natural Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ivy Natural Resources are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ivy Natural may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Washington Mutual

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Washington Mutual Investors are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Washington Mutual may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Ivy Natural and Washington Mutual

The main advantage of trading using opposite Ivy Natural and Washington Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ivy Natural 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.

The idea behind Ivy Natural Resources and Washington Mutual Investors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.