Correlation Between Mfs Technology and Federated Ohio
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Federated Ohio 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 Technology and Federated Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Technology Fund and Federated Ohio Municipal, you can compare the effects of market volatilities on Mfs Technology and Federated Ohio 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 Technology with a short position of Federated Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Federated Ohio.
Diversification Opportunities for Mfs Technology and Federated Ohio
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mfs and Federated is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Federated Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ohio Municipal and Mfs Technology 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 Technology Fund are associated (or correlated) with Federated Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ohio Municipal has no effect on the direction of Mfs Technology i.e., Mfs Technology and Federated Ohio go up and down completely randomly.
Pair Corralation between Mfs Technology and Federated Ohio
Assuming the 90 days horizon Mfs Technology Fund is expected to generate 6.71 times more return on investment than Federated Ohio. However, Mfs Technology is 6.71 times more volatile than Federated Ohio Municipal. It trades about 0.15 of its potential returns per unit of risk. Federated Ohio Municipal is currently generating about 0.32 per unit of risk. If you would invest 5,258 in Mfs Technology Fund on September 13, 2024 and sell it today you would earn a total of 169.00 from holding Mfs Technology Fund or generate 3.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Technology Fund vs. Federated Ohio Municipal
Performance |
| Timeline |
| Mfs Technology |
| Federated Ohio Municipal |
Mfs Technology and Federated Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Federated Ohio
The main advantage of trading using opposite Mfs Technology and Federated Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Federated Ohio 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 Federated Ohio will offset losses from the drop in Federated Ohio's long position.| Mfs Technology vs. Rationalpier 88 Convertible | Mfs Technology vs. Lord Abbett Convertible | Mfs Technology vs. Advent Claymore Convertible | Mfs Technology vs. Allianzgi Convertible Income |
| Federated Ohio vs. Federated Emerging Market | Federated Ohio vs. Federated Mdt All | Federated Ohio vs. Federated Mdt Balanced | Federated Ohio vs. Federated Global Allocation |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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