Correlation Between Aam Select and Mfs Prudent
Can any of the company-specific risk be diversified away by investing in both Aam Select and Mfs Prudent 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 Aam Select and Mfs Prudent into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Mfs Prudent Investor, you can compare the effects of market volatilities on Aam Select and Mfs Prudent 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 Aam Select with a short position of Mfs Prudent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Mfs Prudent.
Diversification Opportunities for Aam Select and Mfs Prudent
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aam and Mfs is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Mfs Prudent Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Prudent Investor and Aam Select 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 Aam Select Income are associated (or correlated) with Mfs Prudent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Prudent Investor has no effect on the direction of Aam Select i.e., Aam Select and Mfs Prudent go up and down completely randomly.
Pair Corralation between Aam Select and Mfs Prudent
Assuming the 90 days horizon Aam Select is expected to generate 2.39 times less return on investment than Mfs Prudent. In addition to that, Aam Select is 1.1 times more volatile than Mfs Prudent Investor. It trades about 0.14 of its total potential returns per unit of risk. Mfs Prudent Investor is currently generating about 0.38 per unit of volatility. If you would invest 1,187 in Mfs Prudent Investor on September 13, 2024 and sell it today you would earn a total of 25.00 from holding Mfs Prudent Investor or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Mfs Prudent Investor
Performance |
| Timeline |
| Aam Select Income |
| Mfs Prudent Investor |
Aam Select and Mfs Prudent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Mfs Prudent
The main advantage of trading using opposite Aam Select and Mfs Prudent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Mfs Prudent 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 Prudent will offset losses from the drop in Mfs Prudent's long position.| Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aamhimco Short Duration | Aam Select vs. Aambahl Gaynor Income |
| Mfs Prudent vs. Volumetric Fund Volumetric | Mfs Prudent vs. Ab Value Fund | Mfs Prudent vs. Aam Select Income | Mfs Prudent vs. Arrow Managed Futures |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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