Correlation Between Mfs Prudent and Mfs Aggressive
Can any of the company-specific risk be diversified away by investing in both Mfs Prudent and Mfs Aggressive 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 Prudent and Mfs Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Prudent Investor and Mfs Aggressive Growth, you can compare the effects of market volatilities on Mfs Prudent and Mfs Aggressive 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 Prudent with a short position of Mfs Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Prudent and Mfs Aggressive.
Diversification Opportunities for Mfs Prudent and Mfs Aggressive
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mfs and Mfs is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Prudent Investor and Mfs Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Aggressive Growth and Mfs Prudent 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 Prudent Investor are associated (or correlated) with Mfs Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Aggressive Growth has no effect on the direction of Mfs Prudent i.e., Mfs Prudent and Mfs Aggressive go up and down completely randomly.
Pair Corralation between Mfs Prudent and Mfs Aggressive
Assuming the 90 days horizon Mfs Prudent Investor is expected to generate 0.61 times more return on investment than Mfs Aggressive. However, Mfs Prudent Investor is 1.65 times less risky than Mfs Aggressive. It trades about 0.42 of its potential returns per unit of risk. Mfs Aggressive Growth is currently generating about -0.04 per unit of risk. If you would invest 1,187 in Mfs Prudent Investor on November 28, 2024 and sell it today you would earn a total of 37.00 from holding Mfs Prudent Investor or generate 3.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Prudent Investor vs. Mfs Aggressive Growth
Performance |
| Timeline |
| Mfs Prudent Investor |
| Mfs Aggressive Growth |
Mfs Prudent and Mfs Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Prudent and Mfs Aggressive
The main advantage of trading using opposite Mfs Prudent and Mfs Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Prudent position performs unexpectedly, Mfs Aggressive 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 Aggressive will offset losses from the drop in Mfs Aggressive's long position.| Mfs Prudent vs. Bbh Intermediate Municipal | Mfs Prudent vs. Intermediate Term Tax Free Bond | Mfs Prudent vs. Ab Municipal Bond | Mfs Prudent vs. Us Government Securities |
| Mfs Aggressive vs. Wasatch Large Cap | Mfs Aggressive vs. Avantis Large Cap | Mfs Aggressive vs. Fisher Large Cap | Mfs Aggressive vs. Profunds Large Cap Growth |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |