Correlation Between Barloworld and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Mfs Growth Fund, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Mfs Growth.
Diversification Opportunities for Barloworld and Mfs Growth
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Barloworld and Mfs is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Mfs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Fund and Barloworld 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 Barloworld Ltd ADR 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 Fund has no effect on the direction of Barloworld i.e., Barloworld and Mfs Growth go up and down completely randomly.
Pair Corralation between Barloworld and Mfs Growth
Assuming the 90 days horizon Barloworld Ltd ADR is expected to generate 5.4 times more return on investment than Mfs Growth. However, Barloworld is 5.4 times more volatile than Mfs Growth Fund. It trades about 0.09 of its potential returns per unit of risk. Mfs Growth Fund is currently generating about 0.09 per unit of risk. If you would invest 488.00 in Barloworld Ltd ADR on October 25, 2024 and sell it today you would earn a total of 38.00 from holding Barloworld Ltd ADR or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Mfs Growth Fund
Performance |
| Timeline |
| Barloworld ADR |
| Mfs Growth Fund |
Barloworld and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Mfs Growth
The main advantage of trading using opposite Barloworld and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Mfs Growth vs. Jpmorgan Value Advantage | Mfs Growth vs. Jpmorgan Equity Income | Mfs Growth vs. Barloworld Ltd ADR | Mfs Growth vs. Morningstar Unconstrained Allocation |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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