Correlation Between Mfs Utilities and Aam Select
Can any of the company-specific risk be diversified away by investing in both Mfs Utilities and Aam Select 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 Utilities and Aam Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Utilities Fund and Aam Select Income, you can compare the effects of market volatilities on Mfs Utilities and Aam Select 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 Utilities with a short position of Aam Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Utilities and Aam Select.
Diversification Opportunities for Mfs Utilities and Aam Select
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mfs and Aam is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Utilities Fund and Aam Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aam Select Income and Mfs Utilities 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 Utilities Fund are associated (or correlated) with Aam Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aam Select Income has no effect on the direction of Mfs Utilities i.e., Mfs Utilities and Aam Select go up and down completely randomly.
Pair Corralation between Mfs Utilities and Aam Select
Assuming the 90 days horizon Mfs Utilities Fund is expected to generate 3.04 times more return on investment than Aam Select. However, Mfs Utilities is 3.04 times more volatile than Aam Select Income. It trades about 0.02 of its potential returns per unit of risk. Aam Select Income is currently generating about -0.11 per unit of risk. If you would invest 2,417 in Mfs Utilities Fund on August 26, 2024 and sell it today you would earn a total of 8.00 from holding Mfs Utilities Fund or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Utilities Fund vs. Aam Select Income
Performance |
| Timeline |
| Mfs Utilities |
| Aam Select Income |
Mfs Utilities and Aam Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Utilities and Aam Select
The main advantage of trading using opposite Mfs Utilities and Aam Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Utilities position performs unexpectedly, Aam Select 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 Aam Select will offset losses from the drop in Aam Select's long position.| Mfs Utilities vs. Aam Select Income | Mfs Utilities vs. Rbc Microcap Value | Mfs Utilities vs. Iaadx | Mfs Utilities vs. Leggmason Partners Institutional |
| Aam Select vs. Ashmore Emerging Markets | Aam Select vs. Pioneer Money Market | Aam Select vs. Rbc Funds Trust | Aam Select vs. Legg Mason Partners |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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