Correlation Between MFS Special and Allianzgi Equity

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

By analyzing existing cross correlation between MFS Special Value and Allianzgi Equity Convertible, you can compare the effects of market volatilities on MFS Special and Allianzgi Equity 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 MFS Special with a short position of Allianzgi Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Special and Allianzgi Equity.

Diversification Opportunities for MFS Special and Allianzgi Equity

0.1

Correlation Coefficient

MFS Special  Allianzgi Equity

Average diversification

The 3 months correlation between MFS and Allianzgi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding MFS Special Value and Allianzgi Equity Convertible in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Equity Con and MFS Special 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 MFS Special Value are associated (or correlated) with Allianzgi Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Equity Con has no effect on the direction of MFS Special i.e., MFS Special and Allianzgi Equity go up and down completely randomly.

Pair Corralation between MFS Special and Allianzgi Equity

If you would invest  2,211  in Allianzgi Equity Convertible on September 14, 2024 and sell it today you would earn a total of  237.00  from holding Allianzgi Equity Convertible or generate 10.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

MFS Special Value  vs.  Allianzgi Equity Convertible

MFS Special Value

Risk-Adjusted Performance

0 of 100

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.

Allianzgi Equity Con

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Equity Convertible are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather inconsistent forward indicators, Allianzgi Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with MFS Special and Allianzgi Equity

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

The idea behind MFS Special Value and Allianzgi Equity Convertible 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.