Correlation Between American Mutual and Mfs Research
Can any of the company-specific risk be diversified away by investing in both American Mutual and Mfs Research 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 Research 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 Research Fund, you can compare the effects of market volatilities on American Mutual and Mfs Research 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 Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Mfs Research.
Diversification Opportunities for American Mutual and Mfs Research
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Mfs is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Mfs Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research 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 Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research has no effect on the direction of American Mutual i.e., American Mutual and Mfs Research go up and down completely randomly.
Pair Corralation between American Mutual and Mfs Research
Assuming the 90 days horizon American Mutual Fund is expected to generate 0.8 times more return on investment than Mfs Research. However, American Mutual Fund is 1.25 times less risky than Mfs Research. It trades about 0.21 of its potential returns per unit of risk. Mfs Research Fund is currently generating about 0.15 per unit of risk. If you would invest 5,604 in American Mutual Fund on October 26, 2024 and sell it today you would earn a total of 139.00 from holding American Mutual Fund or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Mfs Research Fund
Performance |
| Timeline |
| American Mutual |
| Mfs Research |
American Mutual and Mfs Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Mfs Research
The main advantage of trading using opposite American Mutual and Mfs Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Mfs Research 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 Research will offset losses from the drop in Mfs Research's long position.| American Mutual vs. Baron Real Estate | American Mutual vs. Short Real Estate | American Mutual vs. Tiaa Cref Real Estate | American Mutual vs. Jhancock Real Estate |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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