Correlation Between Summit Midstream and Mfs Blended
Can any of the company-specific risk be diversified away by investing in both Summit Midstream 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 Summit Midstream and Mfs Blended into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Summit Midstream Partners and Mfs Blended Research, you can compare the effects of market volatilities on Summit Midstream 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 Summit Midstream with a short position of Mfs Blended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Summit Midstream and Mfs Blended.
Diversification Opportunities for Summit Midstream and Mfs Blended
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Summit and Mfs is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Summit Midstream Partners 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 Summit Midstream 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 Summit Midstream Partners 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 Summit Midstream i.e., Summit Midstream and Mfs Blended go up and down completely randomly.
Pair Corralation between Summit Midstream and Mfs Blended
Given the investment horizon of 90 days Summit Midstream Partners is expected to generate 1.48 times more return on investment than Mfs Blended. However, Summit Midstream is 1.48 times more volatile than Mfs Blended Research. It trades about 0.04 of its potential returns per unit of risk. Mfs Blended Research is currently generating about 0.0 per unit of risk. If you would invest 2,760 in Summit Midstream Partners on January 25, 2024 and sell it today you would earn a total of 24.00 from holding Summit Midstream Partners or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Summit Midstream Partners vs. Mfs Blended Research
Performance |
| Timeline |
| Summit Midstream Partners |
| Mfs Blended Research |
Summit Midstream and Mfs Blended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Summit Midstream and Mfs Blended
The main advantage of trading using opposite Summit Midstream and Mfs Blended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Summit Midstream 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.The idea behind Summit Midstream Partners and Mfs Blended Research 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.| Mfs Blended vs. Amana Income Fund | Mfs Blended vs. Amana Growth Fund | Mfs Blended vs. Amana Participation Fund | Mfs Blended vs. HUMANA INC |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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