Correlation Between Mfs Intrinsic and Western Asset
Can any of the company-specific risk be diversified away by investing in both Mfs Intrinsic and Western Asset 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 Intrinsic and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Intrinsic Value and Western Asset Diversified, you can compare the effects of market volatilities on Mfs Intrinsic and Western Asset 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 Intrinsic with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Intrinsic and Western Asset.
Diversification Opportunities for Mfs Intrinsic and Western Asset
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mfs and Western is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intrinsic Value and Western Asset Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Diversified and Mfs Intrinsic 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 Intrinsic Value are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Diversified has no effect on the direction of Mfs Intrinsic i.e., Mfs Intrinsic and Western Asset go up and down completely randomly.
Pair Corralation between Mfs Intrinsic and Western Asset
Assuming the 90 days horizon Mfs Intrinsic Value is expected to generate 2.61 times more return on investment than Western Asset. However, Mfs Intrinsic is 2.61 times more volatile than Western Asset Diversified. It trades about 0.14 of its potential returns per unit of risk. Western Asset Diversified is currently generating about -0.08 per unit of risk. If you would invest 1,202 in Mfs Intrinsic Value on September 12, 2024 and sell it today you would earn a total of 70.00 from holding Mfs Intrinsic Value or generate 5.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Intrinsic Value vs. Western Asset Diversified
Performance |
| Timeline |
| Mfs Intrinsic Value |
| Western Asset Diversified |
Mfs Intrinsic and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Intrinsic and Western Asset
The main advantage of trading using opposite Mfs Intrinsic and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Intrinsic position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Mfs Intrinsic vs. Fisher Large Cap | Mfs Intrinsic vs. Guidemark Large Cap | Mfs Intrinsic vs. Washington Mutual Investors | Mfs Intrinsic vs. Enhanced Large Pany |
| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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