Correlation Between American Funds and Mfs Value
Can any of the company-specific risk be diversified away by investing in both American Funds and Mfs Value 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 American Funds and Mfs Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Mfs Value Fund, you can compare the effects of market volatilities on American Funds and Mfs Value 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 American Funds with a short position of Mfs Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Mfs Value.
Diversification Opportunities for American Funds and Mfs Value
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between American and Mfs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund and American Funds 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 American Funds American are associated (or correlated) with Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of American Funds i.e., American Funds and Mfs Value go up and down completely randomly.
Pair Corralation between American Funds and Mfs Value
Assuming the 90 days horizon American Funds is expected to generate 1.44 times less return on investment than Mfs Value. But when comparing it to its historical volatility, American Funds American is 1.17 times less risky than Mfs Value. It trades about 0.14 of its potential returns per unit of risk. Mfs Value Fund is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 5,256 in Mfs Value Fund on August 29, 2024 and sell it today you would earn a total of 154.00 from holding Mfs Value Fund or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Mfs Value Fund
Performance |
| Timeline |
| American Funds American |
| Mfs Value Fund |
American Funds and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Mfs Value
The main advantage of trading using opposite American Funds and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Mfs Value 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 Value will offset losses from the drop in Mfs Value's long position.| American Funds vs. Value Fund Investor | American Funds vs. HUMANA INC | American Funds vs. Aquagold International | American Funds vs. Barloworld Ltd ADR |
| Mfs Value vs. Fidelity Advisor Real | Mfs Value vs. Redwood Real Estate | Mfs Value vs. Dunham Real Estate | Mfs Value vs. Jhancock Real Estate |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |