Correlation Between Guardian Capital and MFS Special

Can any of the company-specific risk be diversified away by investing in both Guardian 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 Guardian 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 Guardian Capital Group and MFS Special Value, you can compare the effects of market volatilities on Guardian 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 Guardian Capital with a short position of MFS Special. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardian Capital and MFS Special.

Diversification Opportunities for Guardian Capital and MFS Special

0.0

Correlation Coefficient

Guardian Capital  MFS Special

Pay attention - limited upside

The 3 months correlation between Guardian and MFS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Guardian Capital Group 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 Guardian 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 Guardian Capital Group 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 Guardian Capital i.e., Guardian Capital and MFS Special go up and down completely randomly.

Pair Corralation between Guardian Capital and MFS Special

If you would invest (100.00) in MFS Special Value on December 28, 2024 and sell it today you would earn a total of  100.00  from holding MFS Special Value or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Guardian Capital Group  vs.  MFS Special Value

Guardian Capital

Risk-Adjusted Performance

Very Weak

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

MFS Special Value

Risk-Adjusted Performance

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 Guardian Capital and MFS Special

The main advantage of trading using opposite Guardian Capital and MFS Special positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardian 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 Guardian Capital Group 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.