Correlation Between Fisher Large and Mfs Blended

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

By analyzing existing cross correlation between Fisher Large Cap and Mfs Blended Research, you can compare the effects of market volatilities on Fisher Large and Mfs Blended 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 Fisher Large with a short position of Mfs Blended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fisher Large and Mfs Blended.

Diversification Opportunities for Fisher Large and Mfs Blended

0.78

Correlation Coefficient

Fisher Large  Mfs Blended

Poor diversification

The 3 months correlation between Fisher and Mfs is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Fisher Large Cap and Mfs Blended Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Blended Research and Fisher Large 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 Fisher Large Cap are associated (or correlated) with Mfs Blended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Blended Research has no effect on the direction of Fisher Large i.e., Fisher Large and Mfs Blended go up and down completely randomly.

Pair Corralation between Fisher Large and Mfs Blended

Assuming the 90 days horizon Fisher Large Cap is expected to generate 0.64 times more return on investment than Mfs Blended. However, Fisher Large Cap is 1.57 times less risky than Mfs Blended. It trades about 0.06 of its potential returns per unit of risk. Mfs Blended Research is currently generating about -0.02 per unit of risk. If you would invest  1,806  in Fisher Large Cap on October 26, 2024 and sell it today you would earn a total of  62.00  from holding Fisher Large Cap or generate 3.43% return on investment over 90 days.

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

Fisher Large Cap  vs.  Mfs Blended Research

Fisher Large Cap

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Fisher Large Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fisher Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Blended Research

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fisher Large and Mfs Blended

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

The idea behind Fisher Large Cap and Mfs Blended Research 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..