Correlation Between European Equity and Mfs Intermediate

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

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

Diversification Opportunities for European Equity and Mfs Intermediate

0.19

Correlation Coefficient

European Equity  Mfs Intermediate

Average diversification

The 3 months correlation between European and Mfs is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding European Equity Closed 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 European Equity 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 European Equity Closed 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 European Equity i.e., European Equity and Mfs Intermediate go up and down completely randomly.

Pair Corralation between European Equity and Mfs Intermediate

Considering the 90-day investment horizon European Equity Closed is expected to under-perform the Mfs Intermediate. In addition to that, European Equity is 1.28 times more volatile than Mfs Intermediate High. It trades about -0.05 of its total potential returns per unit of risk. Mfs Intermediate High is currently generating about -0.04 per unit of volatility. If you would invest  172.00  in Mfs Intermediate High on September 24, 2024 and sell it today you would lose (1.00) from holding Mfs Intermediate High or give up 0.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

European Equity Closed  vs.  Mfs Intermediate High

European Equity Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days European Equity Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mfs Intermediate High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Intermediate High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable forward indicators, Mfs Intermediate is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with European Equity and Mfs Intermediate

The main advantage of trading using opposite European Equity and Mfs Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Equity 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 European Equity Closed 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.