Correlation Between Ford and MFS Special
Can any of the company-specific risk be diversified away by investing in both Ford and MFS Special 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 Special 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 Special Value, you can compare the effects of market volatilities on Ford and MFS Special 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 Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and MFS Special.
Diversification Opportunities for Ford and MFS Special
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ford and MFS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and MFS Special Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Special Value 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 Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Special Value has no effect on the direction of Ford i.e., Ford and MFS Special go up and down completely randomly.
Pair Corralation between Ford and MFS Special
If you would invest 1,122 in Ford Motor on August 28, 2024 and sell it today you would earn a total of 18.00 from holding Ford Motor or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Ford Motor vs. MFS Special Value
Performance |
| Timeline |
| Ford Motor |
| MFS Special Value |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ford and MFS Special Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ford and MFS Special
The main advantage of trading using opposite Ford and MFS Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, MFS Special 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 Special will offset losses from the drop in MFS Special's long position.The idea behind Ford Motor and MFS Special Value 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 Special vs. Brookfield Business Corp | MFS Special vs. Elysee Development Corp | MFS Special vs. DWS Municipal Income | MFS Special vs. Blackrock Munivest |
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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