Correlation Between Ab Small and Mfs International
Can any of the company-specific risk be diversified away by investing in both Ab Small and Mfs International 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 Ab Small and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Mfs International Large, you can compare the effects of market volatilities on Ab Small and Mfs International 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 Ab Small with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Mfs International.
Diversification Opportunities for Ab Small and Mfs International
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between QUAIX and Mfs is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Mfs International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Large and Ab Small 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 Ab Small Cap are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Large has no effect on the direction of Ab Small i.e., Ab Small and Mfs International go up and down completely randomly.
Pair Corralation between Ab Small and Mfs International
Assuming the 90 days horizon Ab Small Cap is expected to generate 1.92 times more return on investment than Mfs International. However, Ab Small is 1.92 times more volatile than Mfs International Large. It trades about 0.15 of its potential returns per unit of risk. Mfs International Large is currently generating about -0.21 per unit of risk. If you would invest 7,313 in Ab Small Cap on August 29, 2024 and sell it today you would earn a total of 595.00 from holding Ab Small Cap or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Mfs International Large
Performance |
| Timeline |
| Ab Small Cap |
| Mfs International Large |
Ab Small and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Mfs International
The main advantage of trading using opposite Ab Small and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Ab Small vs. Putnam Equity Income | Ab Small vs. Putnam Growth Opportunities | Ab Small vs. HUMANA INC | Ab Small vs. Aquagold International |
| Mfs International vs. Chase Growth Fund | Mfs International vs. Ab Centrated Growth | Mfs International vs. Eip Growth And | Mfs International vs. Ab Small Cap |
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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