Correlation Between Mfs Value and Alcoa Corp
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Alcoa Corp 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 Value and Alcoa Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and Alcoa Corp, you can compare the effects of market volatilities on Mfs Value and Alcoa Corp 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 Value with a short position of Alcoa Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Alcoa Corp.
Diversification Opportunities for Mfs Value and Alcoa Corp
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Alcoa is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Alcoa Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alcoa Corp and Mfs Value 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 Value Fund are associated (or correlated) with Alcoa Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alcoa Corp has no effect on the direction of Mfs Value i.e., Mfs Value and Alcoa Corp go up and down completely randomly.
Pair Corralation between Mfs Value and Alcoa Corp
Assuming the 90 days horizon Mfs Value Fund is expected to under-perform the Alcoa Corp. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Value Fund is 3.39 times less risky than Alcoa Corp. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Alcoa Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 3,186 in Alcoa Corp on January 25, 2024 and sell it today you would earn a total of 434.00 from holding Alcoa Corp or generate 13.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. Alcoa Corp
Performance |
| Timeline |
| Mfs Value Fund |
| Alcoa Corp |
Mfs Value and Alcoa Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Alcoa Corp
The main advantage of trading using opposite Mfs Value and Alcoa Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Alcoa Corp 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 Alcoa Corp will offset losses from the drop in Alcoa Corp's long position.| Mfs Value vs. Edgewood Growth Fund | Mfs Value vs. Hartford Schroders Emerging | Mfs Value vs. HUMANA INC | Mfs Value vs. Aquagold International |
| Alcoa Corp vs. Constellium Nv | Alcoa Corp vs. Century Aluminum | Alcoa Corp vs. China Hongqiao Group | Alcoa Corp vs. Kaiser Aluminum |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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