Correlation Between Mfs Utilities and Quantitative Longshort
Can any of the company-specific risk be diversified away by investing in both Mfs Utilities and Quantitative Longshort 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 Quantitative Longshort 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 Quantitative Longshort Equity, you can compare the effects of market volatilities on Mfs Utilities and Quantitative Longshort 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 Quantitative Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Utilities and Quantitative Longshort.
Diversification Opportunities for Mfs Utilities and Quantitative Longshort
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mfs and Quantitative is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Utilities Fund and Quantitative Longshort Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative Longshort 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 Quantitative Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative Longshort has no effect on the direction of Mfs Utilities i.e., Mfs Utilities and Quantitative Longshort go up and down completely randomly.
Pair Corralation between Mfs Utilities and Quantitative Longshort
Assuming the 90 days horizon Mfs Utilities Fund is expected to generate 2.04 times more return on investment than Quantitative Longshort. However, Mfs Utilities is 2.04 times more volatile than Quantitative Longshort Equity. It trades about 0.11 of its potential returns per unit of risk. Quantitative Longshort Equity is currently generating about 0.12 per unit of risk. If you would invest 2,192 in Mfs Utilities Fund on September 1, 2024 and sell it today you would earn a total of 269.00 from holding Mfs Utilities Fund or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Mfs Utilities Fund vs. Quantitative Longshort Equity
Performance |
| Timeline |
| Mfs Utilities |
| Quantitative Longshort |
Mfs Utilities and Quantitative Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Utilities and Quantitative Longshort
The main advantage of trading using opposite Mfs Utilities and Quantitative Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Utilities position performs unexpectedly, Quantitative Longshort 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 Quantitative Longshort will offset losses from the drop in Quantitative Longshort's long position.| Mfs Utilities vs. Dominion Energy | Mfs Utilities vs. Atlantica Sustainable Infrastructure | Mfs Utilities vs. Consolidated Edison | Mfs Utilities vs. Eversource Energy |
| Quantitative Longshort vs. Metropolitan West High | Quantitative Longshort vs. Pioneer High Yield | Quantitative Longshort vs. Western Asset High | Quantitative Longshort vs. Franklin High Income |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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