Correlation Between Barings Global and Mfs Low
Can any of the company-specific risk be diversified away by investing in both Barings Global and Mfs Low 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 Barings Global and Mfs Low into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Global Floating and Mfs Low Volatility, you can compare the effects of market volatilities on Barings Global and Mfs Low 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 Barings Global with a short position of Mfs Low. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Global and Mfs Low.
Diversification Opportunities for Barings Global and Mfs Low
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Barings and Mfs is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Barings Global Floating and Mfs Low Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Low Volatility and Barings Global 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 Barings Global Floating are associated (or correlated) with Mfs Low. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Low Volatility has no effect on the direction of Barings Global i.e., Barings Global and Mfs Low go up and down completely randomly.
Pair Corralation between Barings Global and Mfs Low
Assuming the 90 days horizon Barings Global is expected to generate 1.4 times less return on investment than Mfs Low. But when comparing it to its historical volatility, Barings Global Floating is 3.37 times less risky than Mfs Low. It trades about 0.22 of its potential returns per unit of risk. Mfs Low Volatility is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,682 in Mfs Low Volatility on August 29, 2024 and sell it today you would earn a total of 541.00 from holding Mfs Low Volatility or generate 32.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Global Floating vs. Mfs Low Volatility
Performance |
| Timeline |
| Barings Global Floating |
| Mfs Low Volatility |
Barings Global and Mfs Low Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Global and Mfs Low
The main advantage of trading using opposite Barings Global and Mfs Low positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Global position performs unexpectedly, Mfs Low 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 Low will offset losses from the drop in Mfs Low's long position.| Barings Global vs. Floating Rate Fund | Barings Global vs. Lord Abbett Inv | Barings Global vs. HUMANA INC | Barings Global vs. Aquagold International |
| Mfs Low vs. Gabelli Global Financial | Mfs Low vs. Financial Industries Fund | Mfs Low vs. Prudential Jennison Financial | Mfs Low vs. Transamerica Financial Life |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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