Correlation Between Mfs Prudent and Mfs Georgia
Can any of the company-specific risk be diversified away by investing in both Mfs Prudent and Mfs Georgia 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 Prudent and Mfs Georgia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Prudent Investor and Mfs Georgia Municipal, you can compare the effects of market volatilities on Mfs Prudent and Mfs Georgia 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 Prudent with a short position of Mfs Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Prudent and Mfs Georgia.
Diversification Opportunities for Mfs Prudent and Mfs Georgia
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and Mfs is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Prudent Investor and Mfs Georgia Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Georgia Municipal and Mfs Prudent 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 Prudent Investor are associated (or correlated) with Mfs Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Georgia Municipal has no effect on the direction of Mfs Prudent i.e., Mfs Prudent and Mfs Georgia go up and down completely randomly.
Pair Corralation between Mfs Prudent and Mfs Georgia
Assuming the 90 days horizon Mfs Prudent is expected to generate 1.05 times less return on investment than Mfs Georgia. In addition to that, Mfs Prudent is 2.2 times more volatile than Mfs Georgia Municipal. It trades about 0.18 of its total potential returns per unit of risk. Mfs Georgia Municipal is currently generating about 0.41 per unit of volatility. If you would invest 1,009 in Mfs Georgia Municipal on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Mfs Georgia Municipal or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mfs Prudent Investor vs. Mfs Georgia Municipal
Performance |
| Timeline |
| Mfs Prudent Investor |
| Mfs Georgia Municipal |
Mfs Prudent and Mfs Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Prudent and Mfs Georgia
The main advantage of trading using opposite Mfs Prudent and Mfs Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Prudent position performs unexpectedly, Mfs Georgia 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 Georgia will offset losses from the drop in Mfs Georgia's long position.| Mfs Prudent vs. Rbc Global Equity | Mfs Prudent vs. Us Vector Equity | Mfs Prudent vs. Qs Global Equity | Mfs Prudent vs. Scharf Fund Retail |
| Mfs Georgia vs. Western Asset Diversified | Mfs Georgia vs. Fulcrum Diversified Absolute | Mfs Georgia vs. Stone Ridge Diversified | Mfs Georgia vs. Global Diversified Income |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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