Correlation Between Mfs Emerging and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Mfs Growth 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 Emerging and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Emerging Markets and Mfs Growth Fund, you can compare the effects of market volatilities on Mfs Emerging and Mfs Growth 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 Emerging with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Mfs Growth.
Diversification Opportunities for Mfs Emerging and Mfs Growth
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mfs and Mfs is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Mfs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Fund and Mfs Emerging 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 Emerging Markets are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Fund has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Mfs Growth go up and down completely randomly.
Pair Corralation between Mfs Emerging and Mfs Growth
Assuming the 90 days horizon Mfs Emerging Markets is expected to under-perform the Mfs Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Emerging Markets is 2.23 times less risky than Mfs Growth. The mutual fund trades about -0.33 of its potential returns per unit of risk. The Mfs Growth Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 19,749 in Mfs Growth Fund on August 25, 2024 and sell it today you would earn a total of 898.00 from holding Mfs Growth Fund or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Emerging Markets vs. Mfs Growth Fund
Performance |
| Timeline |
| Mfs Emerging Markets |
| Mfs Growth Fund |
Mfs Emerging and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Mfs Growth
The main advantage of trading using opposite Mfs Emerging and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor |
| Mfs Growth vs. Mfs Value Fund | Mfs Growth vs. Mfs International Value | Mfs Growth vs. Mfs International Diversification | Mfs Growth vs. John Hancock Disciplined |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |