Correlation Between BBX Capital and MFS Special

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

By analyzing existing cross correlation between BBX Capital and MFS Special Value, you can compare the effects of market volatilities on BBX Capital and MFS Special 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 BBX Capital with a short position of MFS Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of BBX Capital and MFS Special.

Diversification Opportunities for BBX Capital and MFS Special

0.0

Correlation Coefficient

BBX Capital  MFS Special

Pay attention - limited upside

The 3 months correlation between BBX and MFS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BBX Capital and MFS Special Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Special Value and BBX Capital 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 BBX Capital are associated (or correlated) with MFS Special. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Special Value has no effect on the direction of BBX Capital i.e., BBX Capital and MFS Special go up and down completely randomly.

Pair Corralation between BBX Capital and MFS Special

Assuming the 90 days horizon BBX Capital is expected to under-perform the MFS Special. In addition to that, BBX Capital is 1.2 times more volatile than MFS Special Value. It trades about -0.04 of its total potential returns per unit of risk. MFS Special Value is currently generating about -0.04 per unit of volatility. If you would invest  433.00  in MFS Special Value on October 26, 2024 and sell it today you would lose (21.00) from holding MFS Special Value or give up 4.85% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	23.68%
Values	Daily Returns

BBX Capital  vs.  MFS Special Value

BBX Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BBX Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

MFS Special Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS Special Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, MFS Special is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with BBX Capital and MFS Special

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

The idea behind BBX Capital and MFS Special Value 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.