Correlation Between Mfs California and Mfs International
Can any of the company-specific risk be diversified away by investing in both Mfs California and Mfs International 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 International 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 International Value, you can compare the effects of market volatilities on Mfs California and Mfs International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs California and Mfs International.
Diversification Opportunities for Mfs California and Mfs International
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and Mfs is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Mfs California Municipal and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Mfs California i.e., Mfs California and Mfs International go up and down completely randomly.
Pair Corralation between Mfs California and Mfs International
Assuming the 90 days horizon Mfs California is expected to generate 2.23 times less return on investment than Mfs International. But when comparing it to its historical volatility, Mfs California Municipal is 2.89 times less risky than Mfs International. It trades about 0.09 of its potential returns per unit of risk. Mfs International Value is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 3,106 in Mfs International Value on September 12, 2024 and sell it today you would earn a total of 600.00 from holding Mfs International Value or generate 19.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.7% |
| Values | Daily Returns |
Mfs California Municipal vs. Mfs International Value
Performance |
| Timeline |
| Mfs California Municipal |
| Mfs International Value |
Mfs California and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs California and Mfs International
The main advantage of trading using opposite Mfs California and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs California position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Mfs California vs. Vanguard California Long Term | Mfs California vs. Vanguard California Long Term | Mfs California vs. SCOR PK | Mfs California vs. Morningstar Unconstrained Allocation |
| Mfs International vs. Mfs Aggressive Growth | Mfs International vs. Mfs Research Fund | Mfs International vs. Mfs Series Trust | Mfs International vs. Mfs California Municipal |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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