Correlation Between MFS Special and Urbana

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

Diversification Opportunities for MFS Special and Urbana

0.0

Correlation Coefficient

MFS Special  Urbana

Pay attention - limited upside

The 3 months correlation between MFS and Urbana is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MFS Special Value and Urbana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urbana 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 Urbana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urbana has no effect on the direction of MFS Special i.e., MFS Special and Urbana go up and down completely randomly.

Pair Corralation between MFS Special and Urbana

If you would invest  392.00  in Urbana on December 28, 2024 and sell it today you would earn a total of  45.00  from holding Urbana or generate 11.48% return on investment over 90 days.

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

MFS Special Value  vs.  Urbana

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.

Urbana

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Urbana are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Urbana reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MFS Special and Urbana

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

The idea behind MFS Special Value and Urbana 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.

Check out your portfolio center.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.