Correlation Between Mfs Mid and MetLife

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Can any of the company-specific risk be diversified away by investing in both Mfs Mid and MetLife 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 Mid and MetLife into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Mid Cap and MetLife, you can compare the effects of market volatilities on Mfs Mid and MetLife 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 Mid with a short position of MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Mid and MetLife.

Diversification Opportunities for Mfs Mid and MetLife

0.81
  Correlation Coefficient

Very poor diversification

The 12 months correlation between Mfs and MetLife is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding MFS MID CAP and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife and Mfs Mid 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 Mid Cap are associated (or correlated) with MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Mfs Mid i.e., Mfs Mid and MetLife go up and down completely randomly.

Pair Corralation between Mfs Mid and MetLife

Assuming the 90 days horizon Mfs Mid Cap is expected to generate 0.65 times more return on investment than MetLife. However, Mfs Mid Cap is 1.53 times less risky than MetLife. It trades about 0.07 of its potential returns per unit of risk. MetLife is currently generating about 0.04 per unit of risk. If you would invest  2,399  in Mfs Mid Cap on December 29, 2023 and sell it today you would earn a total of  630.00  from holding Mfs Mid Cap or generate 26.26% return on investment over 90 days.
Time Period12 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.73%
ValuesDaily Returns

MFS MID CAP  vs.  MetLife

 Performance 
       Timeline  
Mfs Mid Cap 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Mid Cap are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mfs Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
MetLife 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in MetLife are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, MetLife may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Mfs Mid and MetLife Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mfs Mid and MetLife

The main advantage of trading using opposite Mfs Mid and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Mid position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.
The idea behind Mfs Mid Cap and MetLife 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.
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.

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