Correlation Between Europacific Growth and Mfs International
Can any of the company-specific risk be diversified away by investing in both Europacific Growth and Mfs International 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 Europacific Growth and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Europacific Growth Fund and Mfs International Value, you can compare the effects of market volatilities on Europacific Growth and Mfs International 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 Europacific Growth with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Europacific Growth and Mfs International.
Diversification Opportunities for Europacific Growth and Mfs International
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Europacific and Mfs is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Europacific Growth Fund and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value and Europacific Growth 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 Europacific Growth Fund are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Europacific Growth i.e., Europacific Growth and Mfs International go up and down completely randomly.
Pair Corralation between Europacific Growth and Mfs International
Assuming the 90 days horizon Europacific Growth Fund is expected to generate 0.84 times more return on investment than Mfs International. However, Europacific Growth Fund is 1.19 times less risky than Mfs International. It trades about -0.15 of its potential returns per unit of risk. Mfs International Value is currently generating about -0.16 per unit of risk. If you would invest 5,866 in Europacific Growth Fund on August 29, 2024 and sell it today you would lose (137.00) from holding Europacific Growth Fund or give up 2.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Europacific Growth Fund vs. Mfs International Value
Performance |
| Timeline |
| Europacific Growth |
| Mfs International Value |
Europacific Growth and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Europacific Growth and Mfs International
The main advantage of trading using opposite Europacific Growth and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europacific Growth position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Europacific Growth vs. Intermediate Term Tax Free Bond | Europacific Growth vs. California High Yield Municipal | Europacific Growth vs. Counterpoint Tactical Municipal | Europacific Growth vs. T Rowe Price |
| Mfs International vs. Chartwell Small Cap | Mfs International vs. Artisan Small Cap | Mfs International vs. Us Small Cap | Mfs International vs. Baird Smallmid Cap |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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