Correlation Between Astar and Mfs Servative

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

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

Diversification Opportunities for Astar and Mfs Servative

0.3

Correlation Coefficient

Astar  Mfs Servative

Weak diversification

The 3 months correlation between Astar and Mfs is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Mfs Servative Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Servative Allocation and Astar 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 Astar are associated (or correlated) with Mfs Servative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Servative Allocation has no effect on the direction of Astar i.e., Astar and Mfs Servative go up and down completely randomly.

Pair Corralation between Astar and Mfs Servative

Assuming the 90 days trading horizon Astar is expected to under-perform the Mfs Servative. In addition to that, Astar is 4.67 times more volatile than Mfs Servative Allocation. It trades about -0.15 of its total potential returns per unit of risk. Mfs Servative Allocation is currently generating about -0.3 per unit of volatility. If you would invest  1,672  in Mfs Servative Allocation on October 11, 2024 and sell it today you would lose (113.00) from holding Mfs Servative Allocation or give up 6.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Astar  vs.  Mfs Servative Allocation

Astar

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astar are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Astar may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Mfs Servative Allocation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Servative Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Astar and Mfs Servative

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

The idea behind Astar and Mfs Servative Allocation 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.