Correlation Between Guidepath Managed and Mfs New
Can any of the company-specific risk be diversified away by investing in both Guidepath Managed 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 Guidepath Managed and Mfs New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidepath Managed Futures and Mfs New Discovery, you can compare the effects of market volatilities on Guidepath Managed 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 Guidepath Managed with a short position of Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidepath Managed and Mfs New.
Diversification Opportunities for Guidepath Managed and Mfs New
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guidepath and Mfs is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Guidepath Managed Futures 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 Guidepath Managed 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 Guidepath Managed Futures 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 Guidepath Managed i.e., Guidepath Managed and Mfs New go up and down completely randomly.
Pair Corralation between Guidepath Managed and Mfs New
Assuming the 90 days horizon Guidepath Managed Futures is expected to under-perform the Mfs New. But the mutual fund apears to be less risky and, when comparing its historical volatility, Guidepath Managed Futures is 1.55 times less risky than Mfs New. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Mfs New Discovery is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,856 in Mfs New Discovery on September 12, 2024 and sell it today you would earn a total of 359.00 from holding Mfs New Discovery or generate 12.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Guidepath Managed Futures vs. Mfs New Discovery
Performance |
| Timeline |
| Guidepath Managed Futures |
| Mfs New Discovery |
Guidepath Managed and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidepath Managed and Mfs New
The main advantage of trading using opposite Guidepath Managed and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidepath Managed 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.The idea behind Guidepath Managed Futures and Mfs New Discovery 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 New vs. Federated Hermes Inflation | Mfs New vs. Guggenheim Managed Futures | Mfs New vs. Simt Multi Asset Inflation | Mfs New vs. American Funds Inflation |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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