Correlation Between Lind Capital and Mfs International
Can any of the company-specific risk be diversified away by investing in both Lind Capital and Mfs International 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 Lind Capital and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lind Capital Partners and Mfs International Value, you can compare the effects of market volatilities on Lind Capital and Mfs International 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 Lind Capital with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lind Capital and Mfs International.
Diversification Opportunities for Lind Capital and Mfs International
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lind and Mfs is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lind Capital Partners and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value and Lind Capital 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 Lind Capital Partners are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Lind Capital i.e., Lind Capital and Mfs International go up and down completely randomly.
Pair Corralation between Lind Capital and Mfs International
Assuming the 90 days horizon Lind Capital is expected to generate 1.45 times less return on investment than Mfs International. But when comparing it to its historical volatility, Lind Capital Partners is 2.85 times less risky than Mfs International. It trades about 0.14 of its potential returns per unit of risk. Mfs International Value is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,234 in Mfs International Value on September 4, 2024 and sell it today you would earn a total of 451.00 from holding Mfs International Value or generate 13.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Lind Capital Partners vs. Mfs International Value
Performance |
| Timeline |
| Lind Capital Partners |
| Mfs International Value |
Lind Capital and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lind Capital and Mfs International
The main advantage of trading using opposite Lind Capital and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lind Capital position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard 500 Index | Lind Capital vs. Vanguard Total Stock | Lind Capital vs. Vanguard Total Stock |
| Mfs International vs. Oil Gas Ultrasector | Mfs International vs. Goehring Rozencwajg Resources | Mfs International vs. Adams Natural Resources | Mfs International vs. Invesco Energy Fund |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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