Correlation Between Mfs Growth and American Mutual
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and American Mutual 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 American Mutual 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 American Mutual Fund, you can compare the effects of market volatilities on Mfs Growth and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and American Mutual.
Diversification Opportunities for Mfs Growth and American Mutual
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Allocation and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Mfs Growth i.e., Mfs Growth and American Mutual go up and down completely randomly.
Pair Corralation between Mfs Growth and American Mutual
Assuming the 90 days horizon Mfs Growth Allocation is expected to generate 0.86 times more return on investment than American Mutual. However, Mfs Growth Allocation is 1.16 times less risky than American Mutual. It trades about 0.07 of its potential returns per unit of risk. American Mutual Fund is currently generating about -0.07 per unit of risk. If you would invest 2,546 in Mfs Growth Allocation on September 13, 2024 and sell it today you would earn a total of 14.00 from holding Mfs Growth Allocation or generate 0.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mfs Growth Allocation vs. American Mutual Fund
Performance |
| Timeline |
| Mfs Growth Allocation |
| American Mutual |
Mfs Growth and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and American Mutual
The main advantage of trading using opposite Mfs Growth and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.| Mfs Growth vs. American Mutual Fund | Mfs Growth vs. Large Cap Growth Profund | Mfs Growth vs. Guidemark Large Cap | Mfs Growth vs. Qs Large Cap |
| American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund | American Mutual vs. Washington Mutual Investors | American Mutual vs. Aquagold International |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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