Correlation Between Mfs Utilities and Atlantica Sustainable

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

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

Diversification Opportunities for Mfs Utilities and Atlantica Sustainable

-0.36

Correlation Coefficient

Mfs Utilities  Atlantica Sustainable

Very good diversification

The 3 months correlation between Mfs and Atlantica is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Utilities Fund and Atlantica Sustainable Infrastr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlantica Sustainable and Mfs Utilities 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 Utilities Fund are associated (or correlated) with Atlantica Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlantica Sustainable has no effect on the direction of Mfs Utilities i.e., Mfs Utilities and Atlantica Sustainable go up and down completely randomly.

Pair Corralation between Mfs Utilities and Atlantica Sustainable

Assuming the 90 days horizon Mfs Utilities Fund is expected to under-perform the Atlantica Sustainable. In addition to that, Mfs Utilities is 8.89 times more volatile than Atlantica Sustainable Infrastructure. It trades about -0.11 of its total potential returns per unit of risk. Atlantica Sustainable Infrastructure is currently generating about 0.24 per unit of volatility. If you would invest  2,165  in Atlantica Sustainable Infrastructure on September 17, 2024 and sell it today you would earn a total of  34.00  from holding Atlantica Sustainable Infrastructure or generate 1.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.92%
Values	Daily Returns

Mfs Utilities Fund  vs.  Atlantica Sustainable Infrastr

Mfs Utilities

Risk-Adjusted Performance

0 of 100

Very Weak

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

Atlantica Sustainable

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Atlantica Sustainable Infrastructure are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Atlantica Sustainable is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs Utilities and Atlantica Sustainable

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

The idea behind Mfs Utilities Fund and Atlantica Sustainable Infrastructure 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.