Correlation Between Arrow Managed and Mfs International
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Mfs International New, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Mfs International.
Diversification Opportunities for Arrow Managed and Mfs International
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Arrow and Mfs is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures and Mfs International New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International New and Arrow Managed 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 Arrow Managed Futures 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 New has no effect on the direction of Arrow Managed i.e., Arrow Managed and Mfs International go up and down completely randomly.
Pair Corralation between Arrow Managed and Mfs International
Assuming the 90 days horizon Arrow Managed Futures is expected to generate 2.4 times more return on investment than Mfs International. However, Arrow Managed is 2.4 times more volatile than Mfs International New. It trades about 0.06 of its potential returns per unit of risk. Mfs International New is currently generating about -0.19 per unit of risk. If you would invest 553.00 in Arrow Managed Futures on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Arrow Managed Futures or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Mfs International New
Performance |
| Timeline |
| Arrow Managed Futures |
| Mfs International New |
Arrow Managed and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Mfs International
The main advantage of trading using opposite Arrow Managed and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Pimco Trends Managed | Arrow Managed vs. HUMANA INC | Arrow Managed vs. Aquagold International | Arrow Managed vs. Barloworld Ltd ADR |
| Mfs International vs. T Rowe Price | Mfs International vs. T Rowe Price | Mfs International vs. Multisector Bond Sma | Mfs International vs. Barings Active Short |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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