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
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Mfs is 0.4. 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 is expected to generate 1.81 times less return on investment than Mfs Aggressive. But when comparing it to its historical volatility, Mfs Prudent Investor is 1.65 times less risky than Mfs Aggressive. It trades about 0.11 of its potential returns per unit of risk. Mfs Aggressive Growth is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,514 in Mfs Aggressive Growth on August 29, 2024 and sell it today you would earn a total of 655.00 from holding Mfs Aggressive Growth or generate 26.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| 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. American Balanced Fund | Mfs Prudent vs. American Balanced Fund | Mfs Prudent vs. HUMANA INC | Mfs Prudent vs. Aquagold International |
| Mfs Aggressive vs. Blackrock Science Technology | Mfs Aggressive vs. Janus Global Technology | Mfs Aggressive vs. Science Technology Fund | Mfs Aggressive vs. Firsthand Technology Opportunities |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |