Correlation Between MFS Investment and Aberdeen Australia
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Aberdeen Australia 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 Australia 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 Australia Ef, you can compare the effects of market volatilities on MFS Investment and Aberdeen Australia 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 Australia. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Aberdeen Australia.
Diversification Opportunities for MFS Investment and Aberdeen Australia
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Aberdeen is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Aberdeen Australia Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Australia 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 Australia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Australia has no effect on the direction of MFS Investment i.e., MFS Investment and Aberdeen Australia go up and down completely randomly.
Pair Corralation between MFS Investment and Aberdeen Australia
Considering the 90-day investment horizon MFS Investment is expected to generate 1.01 times less return on investment than Aberdeen Australia. But when comparing it to its historical volatility, MFS Investment Grade is 1.98 times less risky than Aberdeen Australia. It trades about 0.06 of its potential returns per unit of risk. Aberdeen Australia Ef is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 381.00 in Aberdeen Australia Ef on November 19, 2024 and sell it today you would earn a total of 66.00 from holding Aberdeen Australia Ef or generate 17.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
MFS Investment Grade vs. Aberdeen Australia Ef
Performance |
| Timeline |
| MFS Investment Grade |
| Aberdeen Australia |
MFS Investment and Aberdeen Australia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Aberdeen Australia
The main advantage of trading using opposite MFS Investment and Aberdeen Australia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Aberdeen Australia 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 Australia will offset losses from the drop in Aberdeen Australia's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Aberdeen Australia vs. Aberdeen Asia Pacific If | Aberdeen Australia vs. Aberdeen Japan Equity | Aberdeen Australia vs. Stone Harbor Emerging | Aberdeen Australia vs. Nuveen Multi Mrkt |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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