Correlation Between Mfs Research and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Mfs Research and Aqr Large 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 Research and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Research Fund and Aqr Large Cap, you can compare the effects of market volatilities on Mfs Research and Aqr Large 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 Research with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Research and Aqr Large.
Diversification Opportunities for Mfs Research and Aqr Large
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Aqr is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Research Fund and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Mfs Research 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 Research Fund are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Mfs Research i.e., Mfs Research and Aqr Large go up and down completely randomly.
Pair Corralation between Mfs Research and Aqr Large
Assuming the 90 days horizon Mfs Research is expected to generate 1.06 times less return on investment than Aqr Large. In addition to that, Mfs Research is 1.43 times more volatile than Aqr Large Cap. It trades about 0.26 of its total potential returns per unit of risk. Aqr Large Cap is currently generating about 0.39 per unit of volatility. If you would invest 2,024 in Aqr Large Cap on November 2, 2024 and sell it today you would earn a total of 88.00 from holding Aqr Large Cap or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Research Fund vs. Aqr Large Cap
Performance |
| Timeline |
| Mfs Research |
| Aqr Large Cap |
Mfs Research and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Research and Aqr Large
The main advantage of trading using opposite Mfs Research and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Research position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Mfs Research vs. Mfs Prudent Investor | Mfs Research vs. Mfs Prudent Investor | Mfs Research vs. Mfs Prudent Investor | Mfs Research vs. Mfs Prudent Investor |
| Aqr Large vs. Aqr International Defensive | Aqr Large vs. Mfs Research Fund | Aqr Large vs. Aqr Large Cap | Aqr Large vs. Aqr Managed Futures |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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