Correlation Between Dow Jones and Mfs International
Can any of the company-specific risk be diversified away by investing in both Dow Jones 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 Dow Jones and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Mfs International Value, you can compare the effects of market volatilities on Dow Jones 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 Dow Jones with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Mfs International.
Diversification Opportunities for Dow Jones and Mfs International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dow and Mfs is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial 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 Dow Jones 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 Dow Jones Industrial 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 Dow Jones i.e., Dow Jones and Mfs International go up and down completely randomly.
Pair Corralation between Dow Jones and Mfs International
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 0.84 times more return on investment than Mfs International. However, Dow Jones Industrial is 1.2 times less risky than Mfs International. It trades about 0.12 of its potential returns per unit of risk. Mfs International Value is currently generating about 0.06 per unit of risk. If you would invest 3,387,678 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 1,103,387 from holding Dow Jones Industrial or generate 32.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Dow Jones Industrial vs. Mfs International Value
Performance |
| Timeline |
Dow Jones and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Mfs International Value
Pair trading matchups for Mfs International
Pair Trading with Dow Jones and Mfs International
The main advantage of trading using opposite Dow Jones and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones 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.| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
| Mfs International vs. Mirova Global Green | Mfs International vs. Ab Global Risk | Mfs International vs. T Rowe Price | Mfs International vs. Scharf Global Opportunity |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |