Correlation Between World Energy and Mfs Mid
Can any of the company-specific risk be diversified away by investing in both World Energy and Mfs Mid 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 World Energy and Mfs Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Mfs Mid Cap, you can compare the effects of market volatilities on World Energy and Mfs Mid 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 World Energy with a short position of Mfs Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Mfs Mid.
Diversification Opportunities for World Energy and Mfs Mid
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between World and Mfs is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund and Mfs Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Mid Cap and World Energy 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 World Energy Fund are associated (or correlated) with Mfs Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Mid Cap has no effect on the direction of World Energy i.e., World Energy and Mfs Mid go up and down completely randomly.
Pair Corralation between World Energy and Mfs Mid
Assuming the 90 days horizon World Energy Fund is expected to generate 0.79 times more return on investment than Mfs Mid. However, World Energy Fund is 1.27 times less risky than Mfs Mid. It trades about 0.67 of its potential returns per unit of risk. Mfs Mid Cap is currently generating about 0.23 per unit of risk. If you would invest 1,435 in World Energy Fund on October 24, 2024 and sell it today you would earn a total of 144.00 from holding World Energy Fund or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Mfs Mid Cap
Performance |
| Timeline |
| World Energy |
| Mfs Mid Cap |
World Energy and Mfs Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Mfs Mid
The main advantage of trading using opposite World Energy and Mfs Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy position performs unexpectedly, Mfs Mid 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 Mid will offset losses from the drop in Mfs Mid's long position.| World Energy vs. Ab Small Cap | World Energy vs. Vy Columbia Small | World Energy vs. Franklin Small Cap | World Energy vs. Ab Small Cap |
| Mfs Mid vs. Pimco Energy Tactical | Mfs Mid vs. Cohen Steers Mlp | Mfs Mid vs. Blackrock All Cap Energy | Mfs Mid vs. World Energy Fund |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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