Correlation Between American Beacon and Mfs Blended
Can any of the company-specific risk be diversified away by investing in both American Beacon and Mfs Blended 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 American Beacon and Mfs Blended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Beacon International and Mfs Blended Research, you can compare the effects of market volatilities on American Beacon and Mfs Blended 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 American Beacon with a short position of Mfs Blended. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Beacon and Mfs Blended.
Diversification Opportunities for American Beacon and Mfs Blended
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding American Beacon International and Mfs Blended Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Blended Research and American Beacon 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 American Beacon International are associated (or correlated) with Mfs Blended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Blended Research has no effect on the direction of American Beacon i.e., American Beacon and Mfs Blended go up and down completely randomly.
Pair Corralation between American Beacon and Mfs Blended
Assuming the 90 days horizon American Beacon International is expected to under-perform the Mfs Blended. In addition to that, American Beacon is 1.01 times more volatile than Mfs Blended Research. It trades about -0.1 of its total potential returns per unit of risk. Mfs Blended Research is currently generating about 0.0 per unit of volatility. If you would invest 1,278 in Mfs Blended Research on January 25, 2024 and sell it today you would earn a total of 0.00 from holding Mfs Blended Research or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Beacon International vs. Mfs Blended Research
Performance |
| Timeline |
| American Beacon Inte |
| Mfs Blended Research |
American Beacon and Mfs Blended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Beacon and Mfs Blended
The main advantage of trading using opposite American Beacon and Mfs Blended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Beacon position performs unexpectedly, Mfs Blended 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 Blended will offset losses from the drop in Mfs Blended's long position.| American Beacon vs. American Beacon Large | American Beacon vs. Large Pany Value | American Beacon vs. American Beacon Balanced | American Beacon vs. American Beacon Small |
| Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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