Correlation Between Ms Global and Huber Capital

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

By analyzing existing cross correlation between Ms Global Fixed and Huber Capital Small, you can compare the effects of market volatilities on Ms Global and Huber Capital 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 Ms Global with a short position of Huber Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ms Global and Huber Capital.

Diversification Opportunities for Ms Global and Huber Capital

-0.32

Correlation Coefficient

Ms Global  Huber Capital

Very good diversification

The 3 months correlation between MFIRX and Huber is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ms Global Fixed and Huber Capital Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Huber Capital Small and Ms Global 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 Ms Global Fixed are associated (or correlated) with Huber Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Huber Capital Small has no effect on the direction of Ms Global i.e., Ms Global and Huber Capital go up and down completely randomly.

Pair Corralation between Ms Global and Huber Capital

Assuming the 90 days horizon Ms Global Fixed is expected to generate 0.12 times more return on investment than Huber Capital. However, Ms Global Fixed is 8.28 times less risky than Huber Capital. It trades about 0.2 of its potential returns per unit of risk. Huber Capital Small is currently generating about -0.13 per unit of risk. If you would invest  518.00  in Ms Global Fixed on December 29, 2024 and sell it today you would earn a total of  10.00  from holding Ms Global Fixed or generate 1.93% return on investment over 90 days.

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

Ms Global Fixed  vs.  Huber Capital Small

Ms Global Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ms Global Fixed are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Ms Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Huber Capital Small

Risk-Adjusted Performance

Very Weak

Over the last 90 days Huber Capital Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of 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.

Pair Trading with Ms Global and Huber Capital

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

The idea behind Ms Global Fixed and Huber Capital Small 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.