Correlation Between Mfs Intermediate and Cullen Small

Can any of the company-specific risk be diversified away by investing in both Mfs Intermediate and Cullen Small 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 Intermediate and Cullen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mfs Intermediate High and Cullen Small Cap, you can compare the effects of market volatilities on Mfs Intermediate and Cullen Small 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 Intermediate with a short position of Cullen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Intermediate and Cullen Small.

Diversification Opportunities for Mfs Intermediate and Cullen Small

0.88

Correlation Coefficient

Mfs Intermediate  Cullen Small

Very poor diversification

The 3 months correlation between Mfs and Cullen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intermediate High and Cullen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cullen Small Cap and Mfs Intermediate 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 Intermediate High are associated (or correlated) with Cullen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cullen Small Cap has no effect on the direction of Mfs Intermediate i.e., Mfs Intermediate and Cullen Small go up and down completely randomly.

Pair Corralation between Mfs Intermediate and Cullen Small

Considering the 90-day investment horizon Mfs Intermediate is expected to generate 1.66 times less return on investment than Cullen Small. But when comparing it to its historical volatility, Mfs Intermediate High is 2.37 times less risky than Cullen Small. It trades about 0.12 of its potential returns per unit of risk. Cullen Small Cap is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,012  in Cullen Small Cap on May 3, 2025 and sell it today you would earn a total of  76.00  from holding Cullen Small Cap or generate 7.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Mfs Intermediate High  vs.  Cullen Small Cap

Mfs Intermediate High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Intermediate High are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable forward indicators, Mfs Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Cullen Small Cap

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cullen Small Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Cullen Small may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mfs Intermediate and Cullen Small

The main advantage of trading using opposite Mfs Intermediate and Cullen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Intermediate position performs unexpectedly, Cullen Small 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 Cullen Small will offset losses from the drop in Cullen Small's long position.

The idea behind Mfs Intermediate High and Cullen Small Cap 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.

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.