Correlation Between Mfs International and Transamerica International
Can any of the company-specific risk be diversified away by investing in both Mfs International and Transamerica 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 Mfs International and Transamerica International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Value and Transamerica International Equity, you can compare the effects of market volatilities on Mfs International and Transamerica 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 Mfs International with a short position of Transamerica International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Transamerica International.
Diversification Opportunities for Mfs International and Transamerica International
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Transamerica is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Value and Transamerica International Equ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica International 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 Value are associated (or correlated) with Transamerica International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica International has no effect on the direction of Mfs International i.e., Mfs International and Transamerica International go up and down completely randomly.
Pair Corralation between Mfs International and Transamerica International
Assuming the 90 days horizon Mfs International is expected to generate 2.61 times less return on investment than Transamerica International. In addition to that, Mfs International is 1.23 times more volatile than Transamerica International Equity. It trades about 0.02 of its total potential returns per unit of risk. Transamerica International Equity is currently generating about 0.06 per unit of volatility. If you would invest 1,757 in Transamerica International Equity on December 1, 2024 and sell it today you would earn a total of 465.00 from holding Transamerica International Equity or generate 26.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Value vs. Transamerica International Equ
Performance |
| Timeline |
| Mfs International Value |
| Transamerica International |
Mfs International and Transamerica International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Transamerica International
The main advantage of trading using opposite Mfs International and Transamerica International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Transamerica 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 Transamerica International will offset losses from the drop in Transamerica International's long position.| Mfs International vs. Jhancock Diversified Macro | Mfs International vs. Putnam Diversified Income | Mfs International vs. Global Diversified Income | Mfs International vs. American Funds Conservative |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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