Correlation Between Huber Capital and Mfs Global

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

By analyzing existing cross correlation between Huber Capital Diversified and Mfs Global Real, you can compare the effects of market volatilities on Huber Capital and Mfs Global 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 Huber Capital with a short position of Mfs Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huber Capital and Mfs Global.

Diversification Opportunities for Huber Capital and Mfs Global

-0.59

Correlation Coefficient

Huber Capital  Mfs Global

Excellent diversification

The 3 months correlation between Huber and Mfs is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Huber Capital Diversified and Mfs Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Global Real and Huber Capital 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 Huber Capital Diversified are associated (or correlated) with Mfs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Global Real has no effect on the direction of Huber Capital i.e., Huber Capital and Mfs Global go up and down completely randomly.

Pair Corralation between Huber Capital and Mfs Global

Assuming the 90 days horizon Huber Capital Diversified is expected to generate 1.18 times more return on investment than Mfs Global. However, Huber Capital is 1.18 times more volatile than Mfs Global Real. It trades about 0.15 of its potential returns per unit of risk. Mfs Global Real is currently generating about -0.16 per unit of risk. If you would invest  2,326  in Huber Capital Diversified on September 13, 2024 and sell it today you would earn a total of  187.00  from holding Huber Capital Diversified or generate 8.04% return on investment over 90 days.

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

Huber Capital Diversified  vs.  Mfs Global Real

Huber Capital Diversified

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Huber Capital Diversified are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Huber Capital may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mfs Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental 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 Huber Capital and Mfs Global

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

The idea behind Huber Capital Diversified and Mfs Global Real 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.