Correlation Between American Funds and Mfs New
Can any of the company-specific risk be diversified away by investing in both American Funds and Mfs New 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 American Funds and Mfs New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds Inflation and Mfs New Discovery, you can compare the effects of market volatilities on American Funds and Mfs New 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 American Funds with a short position of Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mfs New.
Diversification Opportunities for American Funds and Mfs New
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and Mfs is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding American Funds Inflation and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery and American Funds 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 American Funds Inflation are associated (or correlated) with Mfs New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of American Funds i.e., American Funds and Mfs New go up and down completely randomly.
Pair Corralation between American Funds and Mfs New
Assuming the 90 days horizon American Funds Inflation is expected to generate 0.2 times more return on investment than Mfs New. However, American Funds Inflation is 5.04 times less risky than Mfs New. It trades about 0.29 of its potential returns per unit of risk. Mfs New Discovery is currently generating about -0.01 per unit of risk. If you would invest 933.00 in American Funds Inflation on September 13, 2024 and sell it today you would earn a total of 11.00 from holding American Funds Inflation or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
American Funds Inflation vs. Mfs New Discovery
Performance |
| Timeline |
| American Funds Inflation |
| Mfs New Discovery |
American Funds and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mfs New
The main advantage of trading using opposite American Funds and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mfs New 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 New will offset losses from the drop in Mfs New's long position.| American Funds vs. Goldman Sachs Clean | American Funds vs. Great West Goldman Sachs | American Funds vs. Sprott Gold Equity | American Funds vs. Precious Metals And |
| Mfs New vs. Mfs Prudent Investor | Mfs New vs. Mfs Prudent Investor | Mfs New vs. Mfs Prudent Investor | Mfs New vs. Mfs Prudent Investor |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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