Correlation Between Multi Manager and Mfs Utilities
Can any of the company-specific risk be diversified away by investing in both Multi Manager and Mfs Utilities 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 Multi Manager and Mfs Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Multi Manager High Yield and Mfs Utilities Fund, you can compare the effects of market volatilities on Multi Manager and Mfs Utilities 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 Multi Manager with a short position of Mfs Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi Manager and Mfs Utilities.
Diversification Opportunities for Multi Manager and Mfs Utilities
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Multi and Mfs is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Multi Manager High Yield and Mfs Utilities Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Utilities and Multi Manager 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 Multi Manager High Yield are associated (or correlated) with Mfs Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Utilities has no effect on the direction of Multi Manager i.e., Multi Manager and Mfs Utilities go up and down completely randomly.
Pair Corralation between Multi Manager and Mfs Utilities
Assuming the 90 days horizon Multi Manager High Yield is expected to generate 0.21 times more return on investment than Mfs Utilities. However, Multi Manager High Yield is 4.65 times less risky than Mfs Utilities. It trades about 0.19 of its potential returns per unit of risk. Mfs Utilities Fund is currently generating about 0.03 per unit of risk. If you would invest 730.00 in Multi Manager High Yield on August 26, 2024 and sell it today you would earn a total of 122.00 from holding Multi Manager High Yield or generate 16.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Multi Manager High Yield vs. Mfs Utilities Fund
Performance |
| Timeline |
| Multi Manager High |
| Mfs Utilities |
Multi Manager and Mfs Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Multi Manager and Mfs Utilities
The main advantage of trading using opposite Multi Manager and Mfs Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Multi Manager position performs unexpectedly, Mfs Utilities 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 Utilities will offset losses from the drop in Mfs Utilities' long position.| Multi Manager vs. Northern Bond Index | Multi Manager vs. Northern E Bond | Multi Manager vs. Northern Arizona Tax Exempt | Multi Manager vs. Northern Emerging Markets |
| Mfs Utilities vs. Fidelity Capital Income | Mfs Utilities vs. Blackrock High Yield | Mfs Utilities vs. Pimco High Yield | Mfs Utilities vs. Multi Manager High Yield |
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 CEOs Directory module to screen CEOs from public companies around the world.
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