Correlation Between Mfs International and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Mfs International and Ab Bond 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 Ab Bond 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 Ab Bond Inflation, you can compare the effects of market volatilities on Mfs International and Ab Bond 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 Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Ab Bond.
Diversification Opportunities for Mfs International and Ab Bond
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and ABNCX is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Value and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation 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 Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Mfs International i.e., Mfs International and Ab Bond go up and down completely randomly.
Pair Corralation between Mfs International and Ab Bond
Assuming the 90 days horizon Mfs International Value is expected to generate 4.54 times more return on investment than Ab Bond. However, Mfs International is 4.54 times more volatile than Ab Bond Inflation. It trades about 0.17 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.33 per unit of risk. If you would invest 3,695 in Mfs International Value on November 27, 2024 and sell it today you would earn a total of 92.00 from holding Mfs International Value or generate 2.49% 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. Ab Bond Inflation
Performance |
| Timeline |
| Mfs International Value |
| Ab Bond Inflation |
Mfs International and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Ab Bond
The main advantage of trading using opposite Mfs International and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Ab Bond 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Mfs International vs. Vulcan Value Partners | Mfs International vs. Glg Intl Small | Mfs International vs. Legg Mason Partners | Mfs International vs. Small Pany Growth |
| Ab Bond vs. Wisdomtree Siegel Global | Ab Bond vs. Ms Global Fixed | Ab Bond vs. Legg Mason Bw | Ab Bond vs. Mirova Global Green |
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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