Correlation Between Mfs Union and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Mfs Union and Dow Jones 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 Union and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Union Standard and Dow Jones Industrial, you can compare the effects of market volatilities on Mfs Union and Dow Jones 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 Union with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Union and Dow Jones.
Diversification Opportunities for Mfs Union and Dow Jones
Poor diversification
The 3 months correlation between Mfs and Dow is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Union Standard and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Mfs Union 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 Union Standard are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Mfs Union i.e., Mfs Union and Dow Jones go up and down completely randomly.
Pair Corralation between Mfs Union and Dow Jones
Assuming the 90 days horizon Mfs Union Standard is expected to under-perform the Dow Jones. In addition to that, Mfs Union is 2.87 times more volatile than Dow Jones Industrial. It trades about -0.21 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about -0.14 per unit of volatility. If you would invest 4,387,035 in Dow Jones Industrial on September 22, 2024 and sell it today you would lose (103,009) from holding Dow Jones Industrial or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Union Standard vs. Dow Jones Industrial
Performance |
| Timeline |
Mfs Union and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Mfs Union Standard
Pair trading matchups for Mfs Union
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Mfs Union and Dow Jones
The main advantage of trading using opposite Mfs Union and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Union position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Mfs Union vs. Mfs Prudent Investor | Mfs Union vs. Mfs Prudent Investor | Mfs Union vs. Mfs Prudent Investor | Mfs Union vs. Mfs Prudent Investor |
| Dow Jones vs. Hurco Companies | Dow Jones vs. Sabre Corpo | Dow Jones vs. Glacier Bancorp | Dow Jones vs. Barings BDC |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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