Correlation Between Mfs Prudent and Growth Strategy
Can any of the company-specific risk be diversified away by investing in both Mfs Prudent and Growth Strategy 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 Growth Strategy 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 Growth Strategy Fund, you can compare the effects of market volatilities on Mfs Prudent and Growth Strategy 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 Growth Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Prudent and Growth Strategy.
Diversification Opportunities for Mfs Prudent and Growth Strategy
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and GROWTH is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Prudent Investor and Growth Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Strategy 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 Growth Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Strategy has no effect on the direction of Mfs Prudent i.e., Mfs Prudent and Growth Strategy go up and down completely randomly.
Pair Corralation between Mfs Prudent and Growth Strategy
Assuming the 90 days horizon Mfs Prudent is expected to generate 5.68 times less return on investment than Growth Strategy. But when comparing it to its historical volatility, Mfs Prudent Investor is 1.32 times less risky than Growth Strategy. It trades about 0.08 of its potential returns per unit of risk. Growth Strategy Fund is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 1,167 in Growth Strategy Fund on September 5, 2024 and sell it today you would earn a total of 42.00 from holding Growth Strategy Fund or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mfs Prudent Investor vs. Growth Strategy Fund
Performance |
| Timeline |
| Mfs Prudent Investor |
| Growth Strategy |
Mfs Prudent and Growth Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Prudent and Growth Strategy
The main advantage of trading using opposite Mfs Prudent and Growth Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Prudent position performs unexpectedly, Growth Strategy 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 Growth Strategy will offset losses from the drop in Growth Strategy's long position.| Mfs Prudent vs. Mfs Prudent Investor | Mfs Prudent vs. Mfs Prudent Investor | Mfs Prudent vs. Mfs Lifetime 2065 | Mfs Prudent vs. Mfs Lifetime 2065 |
| Growth Strategy vs. Sei Daily Income | Growth Strategy vs. Maryland Tax Free Bond | Growth Strategy vs. Artisan High Income | Growth Strategy vs. Angel Oak Financial |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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