Correlation Between Mfs Aggressive and Sarofim Equity
Can any of the company-specific risk be diversified away by investing in both Mfs Aggressive and Sarofim Equity 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 Aggressive and Sarofim Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Aggressive Growth and Sarofim Equity, you can compare the effects of market volatilities on Mfs Aggressive and Sarofim Equity 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 Aggressive with a short position of Sarofim Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Aggressive and Sarofim Equity.
Diversification Opportunities for Mfs Aggressive and Sarofim Equity
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Sarofim is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Aggressive Growth and Sarofim Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarofim Equity and Mfs Aggressive 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 Aggressive Growth are associated (or correlated) with Sarofim Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarofim Equity has no effect on the direction of Mfs Aggressive i.e., Mfs Aggressive and Sarofim Equity go up and down completely randomly.
Pair Corralation between Mfs Aggressive and Sarofim Equity
Assuming the 90 days horizon Mfs Aggressive Growth is expected to generate 0.76 times more return on investment than Sarofim Equity. However, Mfs Aggressive Growth is 1.31 times less risky than Sarofim Equity. It trades about 0.06 of its potential returns per unit of risk. Sarofim Equity is currently generating about 0.04 per unit of risk. If you would invest 2,493 in Mfs Aggressive Growth on September 4, 2024 and sell it today you would earn a total of 567.00 from holding Mfs Aggressive Growth or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Aggressive Growth vs. Sarofim Equity
Performance |
| Timeline |
| Mfs Aggressive Growth |
| Sarofim Equity |
Mfs Aggressive and Sarofim Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Aggressive and Sarofim Equity
The main advantage of trading using opposite Mfs Aggressive and Sarofim Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Aggressive position performs unexpectedly, Sarofim Equity 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 Sarofim Equity will offset losses from the drop in Sarofim Equity's long position.| Mfs Aggressive vs. Scharf Global Opportunity | Mfs Aggressive vs. William Blair Large | Mfs Aggressive vs. Touchstone Large Cap | Mfs Aggressive vs. Growth Strategy Fund |
| Sarofim Equity vs. Global Technology Portfolio | Sarofim Equity vs. Fidelity Advisor Technology | Sarofim Equity vs. Allianzgi Technology Fund | Sarofim Equity vs. Hennessy Technology Fund |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |