Correlation Between Oil Gas and Mfs Research

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

By analyzing existing cross correlation between Oil Gas Ultrasector and Mfs Research International, you can compare the effects of market volatilities on Oil Gas and Mfs Research 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 Oil Gas with a short position of Mfs Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oil Gas and Mfs Research.

Diversification Opportunities for Oil Gas and Mfs Research

0.0

Correlation Coefficient

Oil Gas  Mfs Research

Pay attention - limited upside

The 3 months correlation between Oil and Mfs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Oil Gas Ultrasector and Mfs Research International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research Interna and Oil Gas 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 Oil Gas Ultrasector are associated (or correlated) with Mfs Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research Interna has no effect on the direction of Oil Gas i.e., Oil Gas and Mfs Research go up and down completely randomly.

Pair Corralation between Oil Gas and Mfs Research

Assuming the 90 days horizon Oil Gas Ultrasector is expected to under-perform the Mfs Research. In addition to that, Oil Gas is 2.05 times more volatile than Mfs Research International. It trades about -0.1 of its total potential returns per unit of risk. Mfs Research International is currently generating about 0.24 per unit of volatility. If you would invest  2,224  in Mfs Research International on March 2, 2024 and sell it today you would earn a total of  73.00  from holding Mfs Research International or generate 3.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Oil Gas Ultrasector  vs.  Mfs Research International

Oil Gas Ultrasector

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oil Gas Ultrasector are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Oil Gas may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Mfs Research Interna

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Research International are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Mfs Research is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Oil Gas and Mfs Research

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

The idea behind Oil Gas Ultrasector and Mfs Research International 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 Commodity Directory module to find actively traded commodities issued by global exchanges.