Correlation Between Amg Frontier and Mfs International

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

Diversification Opportunities for Amg Frontier and Mfs International

0.62
  Correlation Coefficient

Poor diversification

The 3 months correlation between Amg and Mfs is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Amg Frontier Small and Mfs International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Growth and Amg Frontier 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 Amg Frontier Small are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Growth has no effect on the direction of Amg Frontier i.e., Amg Frontier and Mfs International go up and down completely randomly.

Pair Corralation between Amg Frontier and Mfs International

Assuming the 90 days horizon Amg Frontier Small is expected to under-perform the Mfs International. In addition to that, Amg Frontier is 1.79 times more volatile than Mfs International Growth. It trades about -0.26 of its total potential returns per unit of risk. Mfs International Growth is currently generating about -0.31 per unit of volatility. If you would invest  5,202  in Mfs International Growth on October 10, 2024 and sell it today you would lose (433.00) from holding Mfs International Growth or give up 8.32% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Amg Frontier Small  vs.  Mfs International Growth

 Performance 
       Timeline  
Amg Frontier Small 

Risk-Adjusted Performance

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

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mfs International Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Amg Frontier and Mfs International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amg Frontier and Mfs International

The main advantage of trading using opposite Amg Frontier and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amg Frontier position performs unexpectedly, Mfs 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 Mfs International will offset losses from the drop in Mfs International's long position.
The idea behind Amg Frontier Small and Mfs International Growth 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 Anywhere module to track or share privately all of your investments from the convenience of any device.

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