Correlation Between MFS Investment and Aberdeen Global
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Aberdeen Global 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 MFS Investment and Aberdeen Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Investment Grade and Aberdeen Global Premier, you can compare the effects of market volatilities on MFS Investment and Aberdeen Global 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 MFS Investment with a short position of Aberdeen Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Aberdeen Global.
Diversification Opportunities for MFS Investment and Aberdeen Global
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFS and Aberdeen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Aberdeen Global Premier in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Global Premier and MFS Investment 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 MFS Investment Grade are associated (or correlated) with Aberdeen Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Global Premier has no effect on the direction of MFS Investment i.e., MFS Investment and Aberdeen Global go up and down completely randomly.
Pair Corralation between MFS Investment and Aberdeen Global
Considering the 90-day investment horizon MFS Investment is expected to generate 2.58 times less return on investment than Aberdeen Global. But when comparing it to its historical volatility, MFS Investment Grade is 2.96 times less risky than Aberdeen Global. It trades about 0.06 of its potential returns per unit of risk. Aberdeen Global Premier is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 414.00 in Aberdeen Global Premier on August 28, 2024 and sell it today you would earn a total of 16.00 from holding Aberdeen Global Premier or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Aberdeen Global Premier
Performance |
| Timeline |
| MFS Investment Grade |
| Aberdeen Global Premier |
MFS Investment and Aberdeen Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Aberdeen Global
The main advantage of trading using opposite MFS Investment and Aberdeen Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Aberdeen Global 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 Aberdeen Global will offset losses from the drop in Aberdeen Global's long position.| MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International | MFS Investment vs. Barloworld Ltd ADR |
| Aberdeen Global vs. Aberdeen Global Dynamic | Aberdeen Global vs. Blackrock Resources Commodities | Aberdeen Global vs. Aberdeen Total Dynamic | Aberdeen Global vs. Blackrock Enhanced Equity |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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