Correlation Between Microsoft and MFS Active
Can any of the company-specific risk be diversified away by investing in both Microsoft and MFS Active 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 Microsoft and MFS Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and MFS Active Core, you can compare the effects of market volatilities on Microsoft and MFS Active 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 Microsoft with a short position of MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and MFS Active.
Diversification Opportunities for Microsoft and MFS Active
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microsoft and MFS is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and MFS Active Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Core and Microsoft 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 Microsoft are associated (or correlated) with MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active Core has no effect on the direction of Microsoft i.e., Microsoft and MFS Active go up and down completely randomly.
Pair Corralation between Microsoft and MFS Active
Given the investment horizon of 90 days Microsoft is expected to generate 190.31 times less return on investment than MFS Active. But when comparing it to its historical volatility, Microsoft is 93.34 times less risky than MFS Active. It trades about 0.06 of its potential returns per unit of risk. MFS Active Core is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 0.00 in MFS Active Core on December 4, 2024 and sell it today you would earn a total of 2,493 from holding MFS Active Core or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 12.15% |
| Values | Daily Returns |
Microsoft vs. MFS Active Core
Performance |
| Timeline |
| Microsoft |
| MFS Active Core |
Microsoft and MFS Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and MFS Active
The main advantage of trading using opposite Microsoft and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, MFS Active 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 MFS Active will offset losses from the drop in MFS Active's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Adobe Systems Incorporated | Microsoft vs. Crowdstrike Holdings |
| MFS Active vs. Columbia Diversified Fixed | MFS Active vs. Doubleline Etf Trust | MFS Active vs. Virtus Newfleet ABSMBS | MFS Active vs. Vident Core Bond |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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