Correlation Between Azimut Holding and Mfs Intermediate

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

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

Diversification Opportunities for Azimut Holding and Mfs Intermediate

0.22

Correlation Coefficient

Azimut Holding  Mfs Intermediate

Modest diversification

The 3 months correlation between Azimut and Mfs is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Azimut Holding SpA and Mfs Intermediate High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Intermediate High and Azimut Holding 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 Azimut Holding SpA are associated (or correlated) with Mfs Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Intermediate High has no effect on the direction of Azimut Holding i.e., Azimut Holding and Mfs Intermediate go up and down completely randomly.

Pair Corralation between Azimut Holding and Mfs Intermediate

Assuming the 90 days horizon Azimut Holding SpA is expected to under-perform the Mfs Intermediate. In addition to that, Azimut Holding is 5.91 times more volatile than Mfs Intermediate High. It trades about -0.07 of its total potential returns per unit of risk. Mfs Intermediate High is currently generating about 0.09 per unit of volatility. If you would invest  174.00  in Mfs Intermediate High on August 31, 2024 and sell it today you would earn a total of  2.00  from holding Mfs Intermediate High or generate 1.15% return on investment over 90 days.

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

Azimut Holding SpA  vs.  Mfs Intermediate High

Azimut Holding SpA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Azimut Holding SpA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical indicators, Azimut Holding is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Mfs Intermediate High

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Intermediate High are ranked lower than 1 (%) 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.

Pair Trading with Azimut Holding and Mfs Intermediate

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

The idea behind Azimut Holding SpA and Mfs Intermediate High 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.