Correlation Between Consumer Goods and Wasatch International

Can any of the company-specific risk be diversified away by investing in both Consumer Goods and Wasatch International 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 Consumer Goods and Wasatch International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Consumer Goods Ultrasector and Wasatch International Select, you can compare the effects of market volatilities on Consumer Goods and Wasatch International 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 Consumer Goods with a short position of Wasatch International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consumer Goods and Wasatch International.

Diversification Opportunities for Consumer Goods and Wasatch International

0.76

Correlation Coefficient

Consumer Goods  Wasatch International

Poor diversification

The 3 months correlation between Consumer and Wasatch is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Consumer Goods Ultrasector and Wasatch International Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch International and Consumer Goods 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 Consumer Goods Ultrasector are associated (or correlated) with Wasatch International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch International has no effect on the direction of Consumer Goods i.e., Consumer Goods and Wasatch International go up and down completely randomly.

Pair Corralation between Consumer Goods and Wasatch International

Assuming the 90 days horizon Consumer Goods Ultrasector is expected to under-perform the Wasatch International. In addition to that, Consumer Goods is 1.58 times more volatile than Wasatch International Select. It trades about -0.18 of its total potential returns per unit of risk. Wasatch International Select is currently generating about -0.26 per unit of volatility. If you would invest  1,454  in Wasatch International Select on August 20, 2025 and sell it today you would lose (154.00) from holding Wasatch International Select or give up 10.59% of portfolio value over 90 days.

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

Consumer Goods Ultrasector  vs.  Wasatch International Select

Consumer Goods Ultra

Risk-Adjusted Performance

Weakest

Over the last 90 days Consumer Goods Ultrasector has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Wasatch International

Risk-Adjusted Performance

Weakest

Over the last 90 days Wasatch International Select has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Consumer Goods and Wasatch International

The main advantage of trading using opposite Consumer Goods and Wasatch International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consumer Goods position performs unexpectedly, Wasatch International 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 Wasatch International will offset losses from the drop in Wasatch International's long position.

The idea behind Consumer Goods Ultrasector and Wasatch International Select 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.