Correlation Between Mfs Commodity and Commodityrealreturn
Can any of the company-specific risk be diversified away by investing in both Mfs Commodity and Commodityrealreturn 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 Commodity and Commodityrealreturn into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Modity Strategy and Commodityrealreturn Strategy Fund, you can compare the effects of market volatilities on Mfs Commodity and Commodityrealreturn 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 Commodity with a short position of Commodityrealreturn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Commodity and Commodityrealreturn.
Diversification Opportunities for Mfs Commodity and Commodityrealreturn
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Commodityrealreturn is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Modity Strategy and Commodityrealreturn Strategy F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodityrealreturn and Mfs Commodity 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 Modity Strategy are associated (or correlated) with Commodityrealreturn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodityrealreturn has no effect on the direction of Mfs Commodity i.e., Mfs Commodity and Commodityrealreturn go up and down completely randomly.
Pair Corralation between Mfs Commodity and Commodityrealreturn
Assuming the 90 days horizon Mfs Modity Strategy is expected to under-perform the Commodityrealreturn. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Modity Strategy is 12.6 times less risky than Commodityrealreturn. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Commodityrealreturn Strategy Fund is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,124 in Commodityrealreturn Strategy Fund on September 4, 2024 and sell it today you would earn a total of 124.00 from holding Commodityrealreturn Strategy Fund or generate 11.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Modity Strategy vs. Commodityrealreturn Strategy F
Performance |
| Timeline |
| Mfs Modity Strategy |
| Commodityrealreturn |
Mfs Commodity and Commodityrealreturn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Commodity and Commodityrealreturn
The main advantage of trading using opposite Mfs Commodity and Commodityrealreturn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Commodity position performs unexpectedly, Commodityrealreturn 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 Commodityrealreturn will offset losses from the drop in Commodityrealreturn's long position.| Mfs Commodity vs. Kinetics Small Cap | Mfs Commodity vs. Touchstone Small Cap | Mfs Commodity vs. The Hartford Small | Mfs Commodity vs. Oklahoma College Savings |
| Commodityrealreturn vs. Mfs Emerging Markets | Commodityrealreturn vs. Emerging Markets Bond | Commodityrealreturn vs. Aquagold International | Commodityrealreturn vs. Morningstar Unconstrained Allocation |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| 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 | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |