Correlation Between Mfs Intrinsic and California Bond
Can any of the company-specific risk be diversified away by investing in both Mfs Intrinsic and California Bond 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 California Bond 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 California Bond Fund, you can compare the effects of market volatilities on Mfs Intrinsic and California Bond 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 California Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Intrinsic and California Bond.
Diversification Opportunities for Mfs Intrinsic and California Bond
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and California is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intrinsic Value and California Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on California Bond 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 California Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of California Bond has no effect on the direction of Mfs Intrinsic i.e., Mfs Intrinsic and California Bond go up and down completely randomly.
Pair Corralation between Mfs Intrinsic and California Bond
Assuming the 90 days horizon Mfs Intrinsic Value is expected to generate 4.16 times more return on investment than California Bond. However, Mfs Intrinsic is 4.16 times more volatile than California Bond Fund. It trades about 0.06 of its potential returns per unit of risk. California Bond Fund is currently generating about 0.15 per unit of risk. If you would invest 1,267 in Mfs Intrinsic Value on September 14, 2024 and sell it today you would earn a total of 10.00 from holding Mfs Intrinsic Value or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Intrinsic Value vs. California Bond Fund
Performance |
| Timeline |
| Mfs Intrinsic Value |
| California Bond |
Mfs Intrinsic and California Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Intrinsic and California Bond
The main advantage of trading using opposite Mfs Intrinsic and California Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Intrinsic position performs unexpectedly, California Bond 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 California Bond will offset losses from the drop in California Bond's long position.| Mfs Intrinsic vs. California Bond Fund | Mfs Intrinsic vs. Pace High Yield | Mfs Intrinsic vs. Dreyfusstandish Global Fixed | Mfs Intrinsic vs. Morningstar Defensive Bond |
| California Bond vs. Chestnut Street Exchange | California Bond vs. Putnam Money Market | California Bond vs. Ubs Money Series | California Bond vs. The Gabelli Money |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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