Correlation Between MFS Special and Ares Dynamic
Can any of the company-specific risk be diversified away by investing in both MFS Special and Ares Dynamic 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 Special and Ares Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Special Value and Ares Dynamic Credit, you can compare the effects of market volatilities on MFS Special and Ares Dynamic 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 Special with a short position of Ares Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Special and Ares Dynamic.
Diversification Opportunities for MFS Special and Ares Dynamic
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MFS and Ares is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding MFS Special Value and Ares Dynamic Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Dynamic Credit and MFS Special 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 Special Value are associated (or correlated) with Ares Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Dynamic Credit has no effect on the direction of MFS Special i.e., MFS Special and Ares Dynamic go up and down completely randomly.
Pair Corralation between MFS Special and Ares Dynamic
Considering the 90-day investment horizon MFS Special is expected to generate 11.22 times less return on investment than Ares Dynamic. In addition to that, MFS Special is 1.35 times more volatile than Ares Dynamic Credit. It trades about 0.01 of its total potential returns per unit of risk. Ares Dynamic Credit is currently generating about 0.12 per unit of volatility. If you would invest 976.00 in Ares Dynamic Credit on August 28, 2024 and sell it today you would earn a total of 549.00 from holding Ares Dynamic Credit or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.72% |
| Values | Daily Returns |
MFS Special Value vs. Ares Dynamic Credit
Performance |
| Timeline |
| MFS Special Value |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ares Dynamic Credit |
MFS Special and Ares Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Special and Ares Dynamic
The main advantage of trading using opposite MFS Special and Ares Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Special position performs unexpectedly, Ares Dynamic 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 Ares Dynamic will offset losses from the drop in Ares Dynamic's long position.| MFS Special vs. Brookfield Business Corp | MFS Special vs. Elysee Development Corp | MFS Special vs. DWS Municipal Income | MFS Special vs. Blackrock Munivest |
| Ares Dynamic vs. Eaton Vance Floating | Ares Dynamic vs. NXG NextGen Infrastructure | Ares Dynamic vs. GAMCO Natural Resources | Ares Dynamic vs. MFS Investment Grade |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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