Correlation Between Mfs Research and American Independence
Can any of the company-specific risk be diversified away by investing in both Mfs Research and American Independence 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 American Independence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Research International and American Independence Kansas, you can compare the effects of market volatilities on Mfs Research and American Independence 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 American Independence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Research and American Independence.
Diversification Opportunities for Mfs Research and American Independence
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and American is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Research International and American Independence Kansas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Independence 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 International are associated (or correlated) with American Independence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Independence has no effect on the direction of Mfs Research i.e., Mfs Research and American Independence go up and down completely randomly.
Pair Corralation between Mfs Research and American Independence
Assuming the 90 days horizon Mfs Research International is expected to generate 4.3 times more return on investment than American Independence. However, Mfs Research is 4.3 times more volatile than American Independence Kansas. It trades about 0.03 of its potential returns per unit of risk. American Independence Kansas is currently generating about 0.03 per unit of risk. If you would invest 2,137 in Mfs Research International on October 22, 2024 and sell it today you would earn a total of 112.00 from holding Mfs Research International or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Research International vs. American Independence Kansas
Performance |
| Timeline |
| Mfs Research Interna |
| American Independence |
Mfs Research and American Independence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Research and American Independence
The main advantage of trading using opposite Mfs Research and American Independence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Research position performs unexpectedly, American Independence 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 American Independence will offset losses from the drop in American Independence's long position.| Mfs Research vs. Calamos Dynamic Convertible | Mfs Research vs. Gabelli Convertible And | Mfs Research vs. Putnam Convertible Securities | Mfs Research vs. Rationalpier 88 Convertible |
| American Independence vs. Gabelli Convertible And | American Independence vs. Calamos Dynamic Convertible | American Independence vs. Fidelity Sai Convertible | American Independence vs. Virtus Convertible |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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