Correlation Between Clarkston Partners and Mfs International

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

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

Diversification Opportunities for Clarkston Partners and Mfs International

-0.32

Correlation Coefficient

Clarkston Partners  Mfs International

Very good diversification

The 3 months correlation between Clarkston and Mfs is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Clarkston Partners Fund 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 Clarkston Partners 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 Clarkston Partners Fund 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 Clarkston Partners i.e., Clarkston Partners and Mfs International go up and down completely randomly.

Pair Corralation between Clarkston Partners and Mfs International

Assuming the 90 days horizon Clarkston Partners Fund is expected to under-perform the Mfs International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Clarkston Partners Fund is 1.44 times less risky than Mfs International. The mutual fund trades about -0.31 of its potential returns per unit of risk. The Mfs International Growth is currently generating about -0.21 of returns per unit of risk over similar time horizon. If you would invest  5,031  in Mfs International Growth on September 23, 2024 and sell it today you would lose (293.00) from holding Mfs International Growth or give up 5.82% of portfolio value over 90 days.

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

Clarkston Partners Fund  vs.  Mfs International Growth

Clarkston Partners

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clarkston Partners Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Clarkston Partners 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

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.

Pair Trading with Clarkston Partners and Mfs International

The main advantage of trading using opposite Clarkston Partners and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clarkston Partners 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 Clarkston Partners Fund 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.