Correlation Between Mfs Aggressive and Mfs California
Can any of the company-specific risk be diversified away by investing in both Mfs Aggressive and Mfs California 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 Mfs California 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 Mfs California Municipal, you can compare the effects of market volatilities on Mfs Aggressive and Mfs California 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 Mfs California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Aggressive and Mfs California.
Diversification Opportunities for Mfs Aggressive and Mfs California
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Mfs is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Aggressive Growth and Mfs California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs California Municipal 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 Mfs California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs California Municipal has no effect on the direction of Mfs Aggressive i.e., Mfs Aggressive and Mfs California go up and down completely randomly.
Pair Corralation between Mfs Aggressive and Mfs California
Assuming the 90 days horizon Mfs Aggressive Growth is expected to under-perform the Mfs California. In addition to that, Mfs Aggressive is 2.93 times more volatile than Mfs California Municipal. It trades about -0.08 of its total potential returns per unit of risk. Mfs California Municipal is currently generating about -0.04 per unit of volatility. If you would invest 561.00 in Mfs California Municipal on November 27, 2024 and sell it today you would lose (4.00) from holding Mfs California Municipal or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Aggressive Growth vs. Mfs California Municipal
Performance |
| Timeline |
| Mfs Aggressive Growth |
| Mfs California Municipal |
Mfs Aggressive and Mfs California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Aggressive and Mfs California
The main advantage of trading using opposite Mfs Aggressive and Mfs California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Aggressive position performs unexpectedly, Mfs California 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 California will offset losses from the drop in Mfs California's long position.| Mfs Aggressive vs. T Rowe Price | Mfs Aggressive vs. Rbc Global Equity | Mfs Aggressive vs. Dreyfusstandish Global Fixed | Mfs Aggressive vs. Mirova Global Green |
| Mfs California vs. American Funds Retirement | Mfs California vs. Moderate Strategy Fund | Mfs California vs. Voya Target Retirement | Mfs California vs. Transamerica Cleartrack Retirement |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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