Correlation Between Ford and Mfs Blended
Can any of the company-specific risk be diversified away by investing in both Ford and Mfs Blended 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 Ford and Mfs Blended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ford Motor and Mfs Blended Research, you can compare the effects of market volatilities on Ford and Mfs Blended 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 Ford with a short position of Mfs Blended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and Mfs Blended.
Diversification Opportunities for Ford and Mfs Blended
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and Mfs is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and Mfs Blended Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Blended Research and Ford 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 Ford Motor are associated (or correlated) with Mfs Blended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Blended Research has no effect on the direction of Ford i.e., Ford and Mfs Blended go up and down completely randomly.
Pair Corralation between Ford and Mfs Blended
Taking into account the 90-day investment horizon Ford is expected to generate 1.68 times less return on investment than Mfs Blended. In addition to that, Ford is 1.89 times more volatile than Mfs Blended Research. It trades about 0.05 of its total potential returns per unit of risk. Mfs Blended Research is currently generating about 0.15 per unit of volatility. If you would invest 2,348 in Mfs Blended Research on August 28, 2024 and sell it today you would earn a total of 233.00 from holding Mfs Blended Research or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ford Motor vs. Mfs Blended Research
Performance |
| Timeline |
| Ford Motor |
| Mfs Blended Research |
Ford and Mfs Blended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and Mfs Blended
The main advantage of trading using opposite Ford and Mfs Blended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, Mfs Blended 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 Blended will offset losses from the drop in Mfs Blended's long position.The idea behind Ford Motor and Mfs Blended Research pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Mfs Blended vs. Mfs Value Fund | Mfs Blended vs. Mfs International Value | Mfs Blended vs. Mfs International Diversification | Mfs Blended vs. John Hancock Disciplined |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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