Correlation Between American Mutual and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both American Mutual and Mfs Growth 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 American Mutual and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Mfs Growth Allocation, you can compare the effects of market volatilities on American Mutual and Mfs Growth 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 American Mutual with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Mfs Growth.
Diversification Opportunities for American Mutual and Mfs Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Mfs Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Allocation and American 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 American Mutual Fund are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Allocation has no effect on the direction of American Mutual i.e., American Mutual and Mfs Growth go up and down completely randomly.
Pair Corralation between American Mutual and Mfs Growth
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.99 times more return on investment than Mfs Growth. However, American Mutual Fund is 1.01 times less risky than Mfs Growth. It trades about 0.09 of its potential returns per unit of risk. Mfs Growth Allocation is currently generating about 0.07 per unit of risk. If you would invest 4,588 in American Mutual Fund on September 13, 2024 and sell it today you would earn a total of 1,314 from holding American Mutual Fund or generate 28.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
American Mutual Fund vs. Mfs Growth Allocation
Performance |
| Timeline |
| American Mutual |
| Mfs Growth Allocation |
American Mutual and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Mfs Growth
The main advantage of trading using opposite American Mutual and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund | American Mutual vs. Washington Mutual Investors | American Mutual vs. Aquagold International |
| Mfs Growth vs. American Mutual Fund | Mfs Growth vs. Large Cap Growth Profund | Mfs Growth vs. Guidemark Large Cap | Mfs Growth vs. Qs Large Cap |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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