Correlation Between Mfs International and Chartwell Small
Can any of the company-specific risk be diversified away by investing in both Mfs International and Chartwell Small 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 Chartwell Small 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 Chartwell Small Cap, you can compare the effects of market volatilities on Mfs International and Chartwell Small 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 Chartwell Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Chartwell Small.
Diversification Opportunities for Mfs International and Chartwell Small
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFS and Chartwell is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Value and Chartwell Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Small Cap 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 Chartwell Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Small Cap has no effect on the direction of Mfs International i.e., Mfs International and Chartwell Small go up and down completely randomly.
Pair Corralation between Mfs International and Chartwell Small
Assuming the 90 days horizon Mfs International Value is expected to generate 0.77 times more return on investment than Chartwell Small. However, Mfs International Value is 1.3 times less risky than Chartwell Small. It trades about 0.17 of its potential returns per unit of risk. Chartwell Small Cap is currently generating about -0.27 per unit of risk. If you would invest 3,761 in Mfs International Value on November 27, 2024 and sell it today you would earn a total of 95.00 from holding Mfs International Value or generate 2.53% 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. Chartwell Small Cap
Performance |
| Timeline |
| Mfs International Value |
| Chartwell Small Cap |
Mfs International and Chartwell Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Chartwell Small
The main advantage of trading using opposite Mfs International and Chartwell Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Chartwell Small 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 Chartwell Small will offset losses from the drop in Chartwell Small's long position.| Mfs International vs. Tiaa Cref Lifestyle Moderate | Mfs International vs. American Funds Retirement | Mfs International vs. Blackrock Retirement Income | Mfs International vs. Moderate Strategy Fund |
| Chartwell Small vs. Massmutual Premier Diversified | Chartwell Small vs. Diversified Bond Fund | Chartwell Small vs. Manning Napier Diversified | Chartwell Small vs. Federated Hermes 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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