Correlation Between Mfs Research and Aquagold International

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

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

Diversification Opportunities for Mfs Research and Aquagold International

0.0

Correlation Coefficient

Mfs Research  Aquagold International

Pay attention - limited upside

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

Pair Corralation between Mfs Research and Aquagold International

Assuming the 90 days horizon Mfs Research is expected to generate 35.43 times less return on investment than Aquagold International. But when comparing it to its historical volatility, Mfs Research Fund is 66.1 times less risky than Aquagold International. It trades about 0.11 of its potential returns per unit of risk. Aquagold International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Aquagold International on August 31, 2024 and sell it today you would lose (16.40) from holding Aquagold International or give up 96.47% of portfolio value over 90 days.

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

Mfs Research Fund  vs.  Aquagold International

Mfs Research

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Research Fund are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly inconsistent forward indicators, Mfs Research may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Aquagold International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Aquagold International is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Mfs Research and Aquagold International

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

The idea behind Mfs Research Fund and Aquagold International 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.