Correlation Between Aam Select and Mfs Technology
Can any of the company-specific risk be diversified away by investing in both Aam Select and Mfs Technology 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 Aam Select and Mfs Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aam Select Income and Mfs Technology Fund, you can compare the effects of market volatilities on Aam Select and Mfs Technology 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 Aam Select with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aam Select and Mfs Technology.
Diversification Opportunities for Aam Select and Mfs Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aam and Mfs is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Aam Select Income and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Aam Select 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 Aam Select Income are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Aam Select i.e., Aam Select and Mfs Technology go up and down completely randomly.
Pair Corralation between Aam Select and Mfs Technology
Assuming the 90 days horizon Aam Select is expected to generate 4.79 times less return on investment than Mfs Technology. But when comparing it to its historical volatility, Aam Select Income is 5.65 times less risky than Mfs Technology. It trades about 0.16 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,549 in Mfs Technology Fund on September 1, 2025 and sell it today you would earn a total of 499.00 from holding Mfs Technology Fund or generate 10.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aam Select Income vs. Mfs Technology Fund
Performance |
| Timeline |
| Aam Select Income |
| Mfs Technology |
Aam Select and Mfs Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aam Select and Mfs Technology
The main advantage of trading using opposite Aam Select and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aam Select position performs unexpectedly, Mfs Technology 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 Technology will offset losses from the drop in Mfs Technology's long position.| Aam Select vs. Wesmark Government Bond | Aam Select vs. Ridgeworth Seix Government | Aam Select vs. Intermediate Government Bond | Aam Select vs. Payden Government Fund |
| Mfs Technology vs. Putnam Convertible Securities | Mfs Technology vs. Absolute Convertible Arbitrage | Mfs Technology vs. Fidelity Sai Convertible | Mfs Technology vs. Allianzgi Convertible Income |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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