Correlation Between Guggenheim Multi-hedge and Mfs International
Can any of the company-specific risk be diversified away by investing in both Guggenheim Multi-hedge 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 Guggenheim Multi-hedge and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guggenheim Multi Hedge Strategies and Mfs International Diversification, you can compare the effects of market volatilities on Guggenheim Multi-hedge 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 Guggenheim Multi-hedge with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guggenheim Multi-hedge and Mfs International.
Diversification Opportunities for Guggenheim Multi-hedge and Mfs International
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guggenheim and Mfs is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Guggenheim Multi Hedge Strateg and Mfs International Diversificat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International and Guggenheim Multi-hedge 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 Guggenheim Multi Hedge Strategies 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 has no effect on the direction of Guggenheim Multi-hedge i.e., Guggenheim Multi-hedge and Mfs International go up and down completely randomly.
Pair Corralation between Guggenheim Multi-hedge and Mfs International
Assuming the 90 days horizon Guggenheim Multi-hedge is expected to generate 24.67 times less return on investment than Mfs International. But when comparing it to its historical volatility, Guggenheim Multi Hedge Strategies is 1.43 times less risky than Mfs International. It trades about 0.0 of its potential returns per unit of risk. Mfs International Diversification is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,967 in Mfs International Diversification on September 2, 2024 and sell it today you would earn a total of 452.00 from holding Mfs International Diversification or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guggenheim Multi Hedge Strateg vs. Mfs International Diversificat
Performance |
| Timeline |
| Guggenheim Multi Hedge |
| Mfs International |
Guggenheim Multi-hedge and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guggenheim Multi-hedge and Mfs International
The main advantage of trading using opposite Guggenheim Multi-hedge and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guggenheim Multi-hedge 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.The idea behind Guggenheim Multi Hedge Strategies and Mfs International Diversification pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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