Correlation Between Hood River and Mfs Intrinsic

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

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

Diversification Opportunities for Hood River and Mfs Intrinsic

0.57

Correlation Coefficient

Hood River  Mfs Intrinsic

Very weak diversification

The 3 months correlation between Hood and Mfs is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hood River New and Mfs Intrinsic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Intrinsic Value and Hood River 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 Hood River New are associated (or correlated) with Mfs Intrinsic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Intrinsic Value has no effect on the direction of Hood River i.e., Hood River and Mfs Intrinsic go up and down completely randomly.

Pair Corralation between Hood River and Mfs Intrinsic

Assuming the 90 days horizon Hood River New is expected to generate 1.81 times more return on investment than Mfs Intrinsic. However, Hood River is 1.81 times more volatile than Mfs Intrinsic Value. It trades about 0.11 of its potential returns per unit of risk. Mfs Intrinsic Value is currently generating about 0.08 per unit of risk. If you would invest  1,000.00  in Hood River New on December 2, 2024 and sell it today you would earn a total of  230.00  from holding Hood River New or generate 23.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	29.09%
Values	Daily Returns

Hood River New  vs.  Mfs Intrinsic Value

Hood River New

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hood River New has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Mfs Intrinsic Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Intrinsic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mfs Intrinsic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hood River and Mfs Intrinsic

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

The idea behind Hood River New and Mfs Intrinsic 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.