Correlation Between Mfs Utilities and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Mfs Utilities and Old Westbury 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 Old Westbury 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 Old Westbury Short Term, you can compare the effects of market volatilities on Mfs Utilities and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Utilities and Old Westbury.
Diversification Opportunities for Mfs Utilities and Old Westbury
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Old is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Utilities Fund and Old Westbury Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Short 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Short has no effect on the direction of Mfs Utilities i.e., Mfs Utilities and Old Westbury go up and down completely randomly.
Pair Corralation between Mfs Utilities and Old Westbury
Assuming the 90 days horizon Mfs Utilities Fund is expected to generate 7.35 times more return on investment than Old Westbury. However, Mfs Utilities is 7.35 times more volatile than Old Westbury Short Term. It trades about 0.11 of its potential returns per unit of risk. Old Westbury Short Term is currently generating about 0.2 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 Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Mfs Utilities Fund vs. Old Westbury Short Term
Performance |
| Timeline |
| Mfs Utilities |
| Old Westbury Short |
Mfs Utilities and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Utilities and Old Westbury
The main advantage of trading using opposite Mfs Utilities and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Utilities position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Mfs Utilities vs. Dominion Energy | Mfs Utilities vs. Atlantica Sustainable Infrastructure | Mfs Utilities vs. Consolidated Edison | Mfs Utilities vs. Eversource Energy |
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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