Correlation Between Mfs Growth and Hartford Healthcare
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and Hartford Healthcare 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 Growth and Hartford Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Growth Allocation and Hartford Healthcare Hls, you can compare the effects of market volatilities on Mfs Growth and Hartford Healthcare 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 Growth with a short position of Hartford Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and Hartford Healthcare.
Diversification Opportunities for Mfs Growth and Hartford Healthcare
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and Hartford is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Allocation and Hartford Healthcare Hls in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Healthcare Hls and Mfs Growth 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 Growth Allocation are associated (or correlated) with Hartford Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Healthcare Hls has no effect on the direction of Mfs Growth i.e., Mfs Growth and Hartford Healthcare go up and down completely randomly.
Pair Corralation between Mfs Growth and Hartford Healthcare
Assuming the 90 days horizon Mfs Growth Allocation is expected to generate 0.78 times more return on investment than Hartford Healthcare. However, Mfs Growth Allocation is 1.28 times less risky than Hartford Healthcare. It trades about 0.08 of its potential returns per unit of risk. Hartford Healthcare Hls is currently generating about 0.03 per unit of risk. If you would invest 1,961 in Mfs Growth Allocation on August 30, 2024 and sell it today you would earn a total of 529.00 from holding Mfs Growth Allocation or generate 26.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Growth Allocation vs. Hartford Healthcare Hls
Performance |
| Timeline |
| Mfs Growth Allocation |
| Hartford Healthcare Hls |
Mfs Growth and Hartford Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and Hartford Healthcare
The main advantage of trading using opposite Mfs Growth and Hartford Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, Hartford Healthcare 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 Hartford Healthcare will offset losses from the drop in Hartford Healthcare's long position.| Mfs Growth vs. Hartford Healthcare Hls | Mfs Growth vs. Lord Abbett Health | Mfs Growth vs. Blackrock Health Sciences | Mfs Growth vs. Health Care 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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