Correlation Between Mfs California and Mfs Aggressive
Can any of the company-specific risk be diversified away by investing in both Mfs California 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 California 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 California Municipal and Mfs Aggressive Growth, you can compare the effects of market volatilities on Mfs California 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 California with a short position of Mfs Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs California and Mfs Aggressive.
Diversification Opportunities for Mfs California and Mfs Aggressive
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 California Municipal 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 California 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 California Municipal 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 California i.e., Mfs California and Mfs Aggressive go up and down completely randomly.
Pair Corralation between Mfs California and Mfs Aggressive
Assuming the 90 days horizon Mfs California Municipal is expected to generate 0.43 times more return on investment than Mfs Aggressive. However, Mfs California Municipal is 2.32 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 -0.03 per unit of risk. If you would invest 554.00 in Mfs California Municipal on November 27, 2024 and sell it today you would earn a total of 3.00 from holding Mfs California Municipal or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs California Municipal vs. Mfs Aggressive Growth
Performance |
| Timeline |
| Mfs California Municipal |
| Mfs Aggressive Growth |
Mfs California and Mfs Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs California and Mfs Aggressive
The main advantage of trading using opposite Mfs California and Mfs Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs California 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 California vs. American Funds Retirement | Mfs California vs. Moderate Strategy Fund | Mfs California vs. Voya Target Retirement | Mfs California vs. Transamerica Cleartrack Retirement |
| Mfs Aggressive vs. T Rowe Price | Mfs Aggressive vs. Rbc Global Equity | Mfs Aggressive vs. Dreyfusstandish Global Fixed | Mfs Aggressive vs. Mirova Global Green |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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