Correlation Between Ab Impact and Mfs Utilities
Can any of the company-specific risk be diversified away by investing in both Ab Impact and Mfs Utilities 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 Ab Impact and Mfs Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Impact Municipal and Mfs Utilities Fund, you can compare the effects of market volatilities on Ab Impact and Mfs Utilities 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 Ab Impact with a short position of Mfs Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Impact and Mfs Utilities.
Diversification Opportunities for Ab Impact and Mfs Utilities
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between ABIMX and Mfs is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ab Impact Municipal and Mfs Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Utilities and Ab Impact 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 Ab Impact Municipal are associated (or correlated) with Mfs Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Utilities has no effect on the direction of Ab Impact i.e., Ab Impact and Mfs Utilities go up and down completely randomly.
Pair Corralation between Ab Impact and Mfs Utilities
Assuming the 90 days horizon Ab Impact Municipal is expected to generate 0.19 times more return on investment than Mfs Utilities. However, Ab Impact Municipal is 5.22 times less risky than Mfs Utilities. It trades about 0.44 of its potential returns per unit of risk. Mfs Utilities Fund is currently generating about -0.11 per unit of risk. If you would invest 985.00 in Ab Impact Municipal on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Ab Impact Municipal or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ab Impact Municipal vs. Mfs Utilities Fund
Performance |
| Timeline |
| Ab Impact Municipal |
| Mfs Utilities |
Ab Impact and Mfs Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Impact and Mfs Utilities
The main advantage of trading using opposite Ab Impact and Mfs Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Impact position performs unexpectedly, Mfs Utilities 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 Mfs Utilities will offset losses from the drop in Mfs Utilities' long position.| Ab Impact vs. SCOR PK | Ab Impact vs. Morningstar Unconstrained Allocation | Ab Impact vs. Thrivent High Yield | Ab Impact vs. Via Renewables |
| Mfs Utilities vs. Dreyfus Government Cash | Mfs Utilities vs. Sit Government Securities | Mfs Utilities vs. Ridgeworth Seix Government | Mfs Utilities vs. Payden Government Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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