Correlation Between MFS Government and Aberdeen Total
Can any of the company-specific risk be diversified away by investing in both MFS Government and Aberdeen Total 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 Government and Aberdeen Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Government Markets and Aberdeen Total Dynamic, you can compare the effects of market volatilities on MFS Government and Aberdeen Total 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 Government with a short position of Aberdeen Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Government and Aberdeen Total.
Diversification Opportunities for MFS Government and Aberdeen Total
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFS and Aberdeen is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding MFS Government Markets and Aberdeen Total Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Total Dynamic and MFS Government 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 Government Markets are associated (or correlated) with Aberdeen Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Total Dynamic has no effect on the direction of MFS Government i.e., MFS Government and Aberdeen Total go up and down completely randomly.
Pair Corralation between MFS Government and Aberdeen Total
Considering the 90-day investment horizon MFS Government Markets is expected to under-perform the Aberdeen Total. But the etf apears to be less risky and, when comparing its historical volatility, MFS Government Markets is 1.01 times less risky than Aberdeen Total. The etf trades about -0.18 of its potential returns per unit of risk. The Aberdeen Total Dynamic is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 874.00 in Aberdeen Total Dynamic on August 31, 2024 and sell it today you would lose (4.00) from holding Aberdeen Total Dynamic or give up 0.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Government Markets vs. Aberdeen Total Dynamic
Performance |
| Timeline |
| MFS Government Markets |
| Aberdeen Total Dynamic |
MFS Government and Aberdeen Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Government and Aberdeen Total
The main advantage of trading using opposite MFS Government and Aberdeen Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Government position performs unexpectedly, Aberdeen Total 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 Aberdeen Total will offset losses from the drop in Aberdeen Total's long position.| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
| Aberdeen Total vs. Aberdeen Global Premier | Aberdeen Total vs. Alliancebernstein National Municipal | Aberdeen Total vs. Aberdeen Standard Global | Aberdeen Total vs. Aberdeen Global Dynamic |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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