Correlation Between Sp Smallcap and Mfs Georgia
Can any of the company-specific risk be diversified away by investing in both Sp Smallcap and Mfs Georgia 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 Sp Smallcap and Mfs Georgia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Smallcap 600 and Mfs Georgia Municipal, you can compare the effects of market volatilities on Sp Smallcap and Mfs Georgia 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 Sp Smallcap with a short position of Mfs Georgia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Mfs Georgia.
Diversification Opportunities for Sp Smallcap and Mfs Georgia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RYSVX and Mfs is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Mfs Georgia Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Georgia Municipal and Sp Smallcap 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 Sp Smallcap 600 are associated (or correlated) with Mfs Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Georgia Municipal has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Mfs Georgia go up and down completely randomly.
Pair Corralation between Sp Smallcap and Mfs Georgia
Assuming the 90 days horizon Sp Smallcap 600 is expected to generate 4.19 times more return on investment than Mfs Georgia. However, Sp Smallcap is 4.19 times more volatile than Mfs Georgia Municipal. It trades about 0.05 of its potential returns per unit of risk. Mfs Georgia Municipal is currently generating about -0.04 per unit of risk. If you would invest 20,227 in Sp Smallcap 600 on October 24, 2024 and sell it today you would earn a total of 1,041 from holding Sp Smallcap 600 or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Sp Smallcap 600 vs. Mfs Georgia Municipal
Performance |
| Timeline |
| Sp Smallcap 600 |
| Mfs Georgia Municipal |
Sp Smallcap and Mfs Georgia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Smallcap and Mfs Georgia
The main advantage of trading using opposite Sp Smallcap and Mfs Georgia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Smallcap position performs unexpectedly, Mfs Georgia 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 Georgia will offset losses from the drop in Mfs Georgia's long position.| Sp Smallcap vs. Real Estate Ultrasector | Sp Smallcap vs. American Century Real | Sp Smallcap vs. Rems Real Estate | Sp Smallcap vs. Short Real Estate |
| Mfs Georgia vs. Lkcm Small Cap | Mfs Georgia vs. Glg Intl Small | Mfs Georgia vs. Qs Defensive Growth | Mfs Georgia vs. Sp Smallcap 600 |
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 Stocks Directory module to find actively traded stocks across global markets.
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