Correlation Between Aam Select and Mfs Utilities
Can any of the company-specific risk be diversified away by investing in both Aam Select and Mfs Utilities 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 Utilities 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 Utilities Fund, you can compare the effects of market volatilities on Aam Select and Mfs Utilities 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 Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Mfs Utilities.
Diversification Opportunities for Aam Select and Mfs Utilities
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Aam and Mfs is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Mfs Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Utilities 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 Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Utilities has no effect on the direction of Aam Select i.e., Aam Select and Mfs Utilities go up and down completely randomly.
Pair Corralation between Aam Select and Mfs Utilities
Assuming the 90 days horizon Aam Select is expected to generate 1.02 times less return on investment than Mfs Utilities. But when comparing it to its historical volatility, Aam Select Income is 2.55 times less risky than Mfs Utilities. It trades about 0.07 of its potential returns per unit of risk. Mfs Utilities Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,191 in Mfs Utilities Fund on September 12, 2024 and sell it today you would earn a total of 171.00 from holding Mfs Utilities Fund or generate 7.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Mfs Utilities Fund
Performance |
| Timeline |
| Aam Select Income |
| Mfs Utilities |
Aam Select and Mfs Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Mfs Utilities
The main advantage of trading using opposite Aam Select and Mfs Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Mfs Utilities 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 Utilities will offset losses from the drop in Mfs Utilities' long position.| Aam Select vs. Guggenheim Diversified Income | Aam Select vs. Federated Hermes Conservative | Aam Select vs. Global Diversified Income | Aam Select vs. Jpmorgan Diversified Fund |
| Mfs Utilities vs. Aam Select Income | Mfs Utilities vs. Volumetric Fund Volumetric | Mfs Utilities vs. Iaadx | Mfs Utilities vs. Materials Portfolio Fidelity |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |