Correlation Between Mfs International and Simt Managed
Can any of the company-specific risk be diversified away by investing in both Mfs International and Simt Managed 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 Simt Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Growth and Simt Managed Volatility, you can compare the effects of market volatilities on Mfs International and Simt Managed 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 Simt Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Simt Managed.
Diversification Opportunities for Mfs International and Simt Managed
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mfs and Simt is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Growth and Simt Managed Volatility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Managed Volatility 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 Growth are associated (or correlated) with Simt Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Managed Volatility has no effect on the direction of Mfs International i.e., Mfs International and Simt Managed go up and down completely randomly.
Pair Corralation between Mfs International and Simt Managed
Assuming the 90 days horizon Mfs International Growth is expected to generate 0.87 times more return on investment than Simt Managed. However, Mfs International Growth is 1.15 times less risky than Simt Managed. It trades about 0.06 of its potential returns per unit of risk. Simt Managed Volatility is currently generating about 0.01 per unit of risk. If you would invest 4,088 in Mfs International Growth on August 26, 2024 and sell it today you would earn a total of 943.00 from holding Mfs International Growth or generate 23.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Growth vs. Simt Managed Volatility
Performance |
| Timeline |
| Mfs International Growth |
| Simt Managed Volatility |
Mfs International and Simt Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Simt Managed
The main advantage of trading using opposite Mfs International and Simt Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Simt Managed 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 Simt Managed will offset losses from the drop in Simt Managed's long position.| Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor |
| Simt Managed vs. Victory Trivalent International | Simt Managed vs. Mfs Research Fund | Simt Managed vs. The Hartford Midcap | Simt Managed vs. Mfs International Growth |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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