Correlation Between Mfs International and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Mfs International and Abbey Capital 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 International and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Diversification and Abbey Capital Multi, you can compare the effects of market volatilities on Mfs International and Abbey Capital 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 International with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Abbey Capital.
Diversification Opportunities for Mfs International and Abbey Capital
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MFS and Abbey is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Diversificat and Abbey Capital Multi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Multi and Mfs International 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 International Diversification are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Multi has no effect on the direction of Mfs International i.e., Mfs International and Abbey Capital go up and down completely randomly.
Pair Corralation between Mfs International and Abbey Capital
Assuming the 90 days horizon Mfs International Diversification is expected to generate 0.8 times more return on investment than Abbey Capital. However, Mfs International Diversification is 1.26 times less risky than Abbey Capital. It trades about 0.26 of its potential returns per unit of risk. Abbey Capital Multi is currently generating about -0.14 per unit of risk. If you would invest 2,365 in Mfs International Diversification on November 29, 2024 and sell it today you would earn a total of 81.00 from holding Mfs International Diversification or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Diversificat vs. Abbey Capital Multi
Performance |
| Timeline |
| Mfs International |
| Abbey Capital Multi |
Mfs International and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Abbey Capital
The main advantage of trading using opposite Mfs International and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Mfs International vs. Mfs Growth Fund | Mfs International vs. Prudential Total Return | Mfs International vs. Mfs Value Fund | Mfs International vs. John Hancock Bond |
| Abbey Capital vs. Vanguard Intermediate Term Government | Abbey Capital vs. Fidelity Series Government | Abbey Capital vs. Prudential Government Money | Abbey Capital vs. Dunham Porategovernment Bond |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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