Correlation Between Mfs Global and Us Government
Can any of the company-specific risk be diversified away by investing in both Mfs Global and Us Government 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 Mfs Global and Us Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Global Alternative and Us Government Securities, you can compare the effects of market volatilities on Mfs Global and Us Government 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 Mfs Global with a short position of Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Global and Us Government.
Diversification Opportunities for Mfs Global and Us Government
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and CGTAX is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Global Alternative and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities and Mfs Global 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 Mfs Global Alternative are associated (or correlated) with Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Mfs Global i.e., Mfs Global and Us Government go up and down completely randomly.
Pair Corralation between Mfs Global and Us Government
Assuming the 90 days horizon Mfs Global Alternative is expected to generate 0.91 times more return on investment than Us Government. However, Mfs Global Alternative is 1.1 times less risky than Us Government. It trades about 0.01 of its potential returns per unit of risk. Us Government Securities is currently generating about -0.17 per unit of risk. If you would invest 1,323 in Mfs Global Alternative on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Mfs Global Alternative or generate 0.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Global Alternative vs. Us Government Securities
Performance |
| Timeline |
| Mfs Global Alternative |
| Us Government Securities |
Mfs Global and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Global and Us Government
The main advantage of trading using opposite Mfs Global and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Global position performs unexpectedly, Us Government 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 Us Government will offset losses from the drop in Us Government's long position.| Mfs Global vs. Us Government Securities | Mfs Global vs. Aig Government Money | Mfs Global vs. Inverse Government Long | Mfs Global vs. Government Securities Fund |
| Us Government vs. Government Securities Fund | Us Government vs. John Hancock Government | Us Government vs. Short Term Government Fund | Us Government vs. Us Government Securities |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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