Correlation Between Mfs International and American Mutual
Can any of the company-specific risk be diversified away by investing in both Mfs International and American Mutual 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 International and American Mutual into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Diversification and American Mutual Fund, you can compare the effects of market volatilities on Mfs International and American Mutual 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 International with a short position of American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and American Mutual.
Diversification Opportunities for Mfs International and American Mutual
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Diversificat and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual and Mfs International 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 International Diversification are associated (or correlated) with American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Mfs International i.e., Mfs International and American Mutual go up and down completely randomly.
Pair Corralation between Mfs International and American Mutual
Assuming the 90 days horizon Mfs International Diversification is expected to generate 1.14 times more return on investment than American Mutual. However, Mfs International is 1.14 times more volatile than American Mutual Fund. It trades about 0.04 of its potential returns per unit of risk. American Mutual Fund is currently generating about 0.04 per unit of risk. If you would invest 1,967 in Mfs International Diversification on February 8, 2024 and sell it today you would earn a total of 369.00 from holding Mfs International Diversification or generate 18.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs International Diversificat vs. American Mutual Fund
Performance |
Timeline |
Mfs International |
American Mutual |
Mfs International and American Mutual Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs International and American Mutual
The main advantage of trading using opposite Mfs International and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual's long position.Mfs International vs. T Rowe Price | Mfs International vs. Spectrum Growth Fund | Mfs International vs. Spectrum Income Fund | Mfs International vs. T Rowe Price |
American Mutual vs. Dodge Cox Stock | American Mutual vs. American Funds American | American Mutual vs. American Funds American | American Mutual vs. American Mutual Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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