Correlation Between Mfs International and New World
Can any of the company-specific risk be diversified away by investing in both Mfs International and New World 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 International and New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Diversification and New World Fund, you can compare the effects of market volatilities on Mfs International and New World 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 International with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and New World.
Diversification Opportunities for Mfs International and New World
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and New is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Diversificat and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund and Mfs International 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 International Diversification are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Mfs International i.e., Mfs International and New World go up and down completely randomly.
Pair Corralation between Mfs International and New World
Assuming the 90 days horizon Mfs International Diversification is expected to generate 1.0 times more return on investment than New World. However, Mfs International is 1.0 times more volatile than New World Fund. It trades about 0.04 of its potential returns per unit of risk. New World Fund is currently generating about 0.02 per unit of risk. If you would invest 2,316 in Mfs International Diversification on September 3, 2024 and sell it today you would earn a total of 107.00 from holding Mfs International Diversification or generate 4.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Diversificat vs. New World Fund
Performance |
| Timeline |
| Mfs International |
| New World Fund |
Mfs International and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and New World
The main advantage of trading using opposite Mfs International and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Mfs International vs. Franklin Dynatech Fund | Mfs International vs. John Hancock Bond | Mfs International vs. Prudential Total Return | Mfs International vs. Mfs Growth Fund |
| New World vs. Franklin Mutual Global | New World vs. Templeton Growth Fund | New World vs. Franklin Real Estate | New World vs. HUMANA INC |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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