Correlation Between Atlas America and MFS Active
Can any of the company-specific risk be diversified away by investing in both Atlas America and MFS Active 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 Atlas America and MFS Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlas America and MFS Active Exchange, you can compare the effects of market volatilities on Atlas America and MFS Active 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 Atlas America with a short position of MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlas America and MFS Active.
Diversification Opportunities for Atlas America and MFS Active
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Atlas and MFS is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Atlas America and MFS Active Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Exchange and Atlas America 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 Atlas America are associated (or correlated) with MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active Exchange has no effect on the direction of Atlas America i.e., Atlas America and MFS Active go up and down completely randomly.
Pair Corralation between Atlas America and MFS Active
Given the investment horizon of 90 days Atlas America is expected to generate 0.92 times more return on investment than MFS Active. However, Atlas America is 1.08 times less risky than MFS Active. It trades about 0.04 of its potential returns per unit of risk. MFS Active Exchange is currently generating about -0.53 per unit of risk. If you would invest 2,519 in Atlas America on October 9, 2024 and sell it today you would earn a total of 4.00 from holding Atlas America or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atlas America vs. MFS Active Exchange
Performance |
| Timeline |
| Atlas America |
| MFS Active Exchange |
Atlas America and MFS Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlas America and MFS Active
The main advantage of trading using opposite Atlas America and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlas America position performs unexpectedly, MFS Active 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 Active will offset losses from the drop in MFS Active's long position.| Atlas America vs. Vanguard Total Stock | Atlas America vs. SPDR SP 500 | Atlas America vs. iShares Core SP | Atlas America vs. Vanguard Total Bond |
| MFS Active vs. First Trust Exchange Traded | MFS Active vs. Vanguard Intermediate Term Treasury | MFS Active vs. Vanguard Long Term Treasury | MFS Active vs. Vanguard Short Term Treasury |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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