Correlation Between Amg Managers and Mfs New

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

By analyzing existing cross correlation between Amg Managers Cadence and Mfs New Discovery, you can compare the effects of market volatilities on Amg Managers and Mfs New 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 Managers with a short position of Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amg Managers and Mfs New.

Diversification Opportunities for Amg Managers and Mfs New

-0.66

Correlation Coefficient

Amg Managers  Mfs New

Excellent diversification

The 3 months correlation between Amg and Mfs is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Amg Managers Cadence and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery and Amg Managers 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 Managers Cadence are associated (or correlated) with Mfs New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Amg Managers i.e., Amg Managers and Mfs New go up and down completely randomly.

Pair Corralation between Amg Managers and Mfs New

Assuming the 90 days horizon Amg Managers Cadence is expected to under-perform the Mfs New. But the mutual fund apears to be less risky and, when comparing its historical volatility, Amg Managers Cadence is 1.45 times less risky than Mfs New. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Mfs New Discovery is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  2,494  in Mfs New Discovery on September 20, 2024 and sell it today you would lose (1.00) from holding Mfs New Discovery or give up 0.04% of portfolio value over 90 days.

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

Amg Managers Cadence  vs.  Mfs New Discovery

Amg Managers Cadence

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amg Managers Cadence 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.

Mfs New Discovery

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Amg Managers and Mfs New

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

The idea behind Amg Managers Cadence and Mfs New Discovery 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.