Correlation Between Baird Small/mid and Mfs Mid
Can any of the company-specific risk be diversified away by investing in both Baird Small/mid and Mfs Mid 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 Baird Small/mid and Mfs Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Smallmid Cap and Mfs Mid Cap, you can compare the effects of market volatilities on Baird Small/mid and Mfs Mid 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 Baird Small/mid with a short position of Mfs Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Small/mid and Mfs Mid.
Diversification Opportunities for Baird Small/mid and Mfs Mid
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Baird and Mfs is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Baird Smallmid Cap and Mfs Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Mid Cap and Baird Small/mid 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 Baird Smallmid Cap are associated (or correlated) with Mfs Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Mid Cap has no effect on the direction of Baird Small/mid i.e., Baird Small/mid and Mfs Mid go up and down completely randomly.
Pair Corralation between Baird Small/mid and Mfs Mid
Assuming the 90 days horizon Baird Smallmid Cap is expected to under-perform the Mfs Mid. In addition to that, Baird Small/mid is 1.08 times more volatile than Mfs Mid Cap. It trades about -0.28 of its total potential returns per unit of risk. Mfs Mid Cap is currently generating about -0.16 per unit of volatility. If you would invest 2,941 in Mfs Mid Cap on November 27, 2024 and sell it today you would lose (100.00) from holding Mfs Mid Cap or give up 3.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Smallmid Cap vs. Mfs Mid Cap
Performance |
| Timeline |
| Baird Smallmid Cap |
| Mfs Mid Cap |
Baird Small/mid and Mfs Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Small/mid and Mfs Mid
The main advantage of trading using opposite Baird Small/mid and Mfs Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Small/mid position performs unexpectedly, Mfs Mid 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 Mid will offset losses from the drop in Mfs Mid's long position.| Baird Small/mid vs. United Kingdom Small | Baird Small/mid vs. Ashmore Emerging Markets | Baird Small/mid vs. Ab Small Cap | Baird Small/mid vs. Ab Small Cap |
| Mfs Mid vs. American Mutual Fund | Mfs Mid vs. Lord Abbett Affiliated | Mfs Mid vs. M Large Cap | Mfs Mid vs. Fisher 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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