Correlation Between Mfs International and Blackrock

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Can any of the company-specific risk be diversified away by investing in both Mfs International and Blackrock 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 International and Blackrock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International New and Blackrock Pa Muni, you can compare the effects of market volatilities on Mfs International and Blackrock 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 International with a short position of Blackrock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Blackrock.

Diversification Opportunities for Mfs International and Blackrock

0.13
  Correlation Coefficient

Average diversification

The 3 months correlation between Mfs and Blackrock is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International New and Blackrock Pa Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Pa Muni and Mfs International 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 International New are associated (or correlated) with Blackrock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Pa Muni has no effect on the direction of Mfs International i.e., Mfs International and Blackrock go up and down completely randomly.

Pair Corralation between Mfs International and Blackrock

Assuming the 90 days horizon Mfs International New is expected to under-perform the Blackrock. In addition to that, Mfs International is 1.46 times more volatile than Blackrock Pa Muni. It trades about -0.53 of its total potential returns per unit of risk. Blackrock Pa Muni is currently generating about -0.44 per unit of volatility. If you would invest  1,010  in Blackrock Pa Muni on October 11, 2024 and sell it today you would lose (31.00) from holding Blackrock Pa Muni or give up 3.07% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Mfs International New  vs.  Blackrock Pa Muni

 Performance 
       Timeline  
Mfs International New 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mfs International 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 technical indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
Blackrock Pa Muni 

Risk-Adjusted Performance

0 of 100

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

Mfs International and Blackrock Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Mfs International and Blackrock

The main advantage of trading using opposite Mfs International and Blackrock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Blackrock 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 Blackrock will offset losses from the drop in Blackrock's long position.
The idea behind Mfs International New and Blackrock Pa Muni 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.

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