Correlation Between Mfs Technology and American Beacon
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and American Beacon 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 Technology and American Beacon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Technology Fund and American Beacon Bridgeway, you can compare the effects of market volatilities on Mfs Technology and American Beacon 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 Technology with a short position of American Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and American Beacon.
Diversification Opportunities for Mfs Technology and American Beacon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and American is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and American Beacon Bridgeway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Beacon Bridgeway and Mfs Technology 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 Technology Fund are associated (or correlated) with American Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Beacon Bridgeway has no effect on the direction of Mfs Technology i.e., Mfs Technology and American Beacon go up and down completely randomly.
Pair Corralation between Mfs Technology and American Beacon
Assuming the 90 days horizon Mfs Technology Fund is expected to under-perform the American Beacon. In addition to that, Mfs Technology is 1.17 times more volatile than American Beacon Bridgeway. It trades about -0.3 of its total potential returns per unit of risk. American Beacon Bridgeway is currently generating about -0.26 per unit of volatility. If you would invest 3,440 in American Beacon Bridgeway on December 5, 2024 and sell it today you would lose (192.00) from holding American Beacon Bridgeway or give up 5.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs Technology Fund vs. American Beacon Bridgeway
Performance |
Timeline |
Mfs Technology |
American Beacon Bridgeway |
Mfs Technology and American Beacon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs Technology and American Beacon
The main advantage of trading using opposite Mfs Technology and American Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, American Beacon 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 American Beacon will offset losses from the drop in American Beacon's long position.Mfs Technology vs. Firsthand Technology Opportunities | Mfs Technology vs. Invesco Technology Fund | Mfs Technology vs. Global Technology Portfolio | Mfs Technology vs. Technology Ultrasector Profund |
American Beacon vs. Pimco Realestaterealreturn Strategy | American Beacon vs. Angel Oak Multi Strategy | American Beacon vs. Eagle Mlp Strategy | American Beacon vs. The Hartford Emerging |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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