Correlation Between Leggmason Partners and Mfs Utilities
Can any of the company-specific risk be diversified away by investing in both Leggmason Partners and Mfs Utilities 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 Leggmason Partners and Mfs Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leggmason Partners Institutional and Mfs Utilities Fund, you can compare the effects of market volatilities on Leggmason Partners and Mfs Utilities 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 Leggmason Partners with a short position of Mfs Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leggmason Partners and Mfs Utilities.
Diversification Opportunities for Leggmason Partners and Mfs Utilities
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Leggmason and MFS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Leggmason Partners Institution and Mfs Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Utilities and Leggmason Partners 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 Leggmason Partners Institutional are associated (or correlated) with Mfs Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Utilities has no effect on the direction of Leggmason Partners i.e., Leggmason Partners and Mfs Utilities go up and down completely randomly.
Pair Corralation between Leggmason Partners and Mfs Utilities
Assuming the 90 days horizon Leggmason Partners is expected to generate 1.1 times less return on investment than Mfs Utilities. But when comparing it to its historical volatility, Leggmason Partners Institutional is 1.35 times less risky than Mfs Utilities. It trades about 0.02 of its potential returns per unit of risk. Mfs Utilities Fund is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,348 in Mfs Utilities Fund on August 30, 2024 and sell it today you would earn a total of 110.00 from holding Mfs Utilities Fund or generate 4.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Leggmason Partners Institution vs. Mfs Utilities Fund
Performance |
| Timeline |
| Leggmason Partners |
| Mfs Utilities |
Leggmason Partners and Mfs Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leggmason Partners and Mfs Utilities
The main advantage of trading using opposite Leggmason Partners and Mfs Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leggmason Partners position performs unexpectedly, Mfs Utilities 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 Utilities will offset losses from the drop in Mfs Utilities' long position.| Leggmason Partners vs. Us Global Investors | Leggmason Partners vs. Ms Global Fixed | Leggmason Partners vs. Mirova Global Green | Leggmason Partners vs. Massmutual Premier Global |
| Mfs Utilities vs. Aqr Long Short Equity | Mfs Utilities vs. Old Westbury Short Term | Mfs Utilities vs. Touchstone Ultra Short | Mfs Utilities vs. Federated Short Intermediate Duration |
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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