Correlation Between Mfs Growth and Balanced Fund
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and Balanced Fund 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 Growth and Balanced Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Growth Fund and Balanced Fund Retail, you can compare the effects of market volatilities on Mfs Growth and Balanced Fund 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 Growth with a short position of Balanced Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and Balanced Fund.
Diversification Opportunities for Mfs Growth and Balanced Fund
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Balanced is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Balanced Fund Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balanced Fund Retail and Mfs Growth 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 Growth Fund are associated (or correlated) with Balanced Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balanced Fund Retail has no effect on the direction of Mfs Growth i.e., Mfs Growth and Balanced Fund go up and down completely randomly.
Pair Corralation between Mfs Growth and Balanced Fund
Assuming the 90 days horizon Mfs Growth Fund is expected to generate 1.82 times more return on investment than Balanced Fund. However, Mfs Growth is 1.82 times more volatile than Balanced Fund Retail. It trades about 0.16 of its potential returns per unit of risk. Balanced Fund Retail is currently generating about 0.07 per unit of risk. If you would invest 14,655 in Mfs Growth Fund on August 29, 2024 and sell it today you would earn a total of 556.00 from holding Mfs Growth Fund or generate 3.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mfs Growth Fund vs. Balanced Fund Retail
Performance |
| Timeline |
| Mfs Growth Fund |
| Balanced Fund Retail |
Mfs Growth and Balanced Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and Balanced Fund
The main advantage of trading using opposite Mfs Growth and Balanced Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, Balanced Fund 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 Balanced Fund will offset losses from the drop in Balanced Fund's long position.| Mfs Growth vs. Mfs Aggressive Growth | Mfs Growth vs. Mfs Research Fund | Mfs Growth vs. Mfs Series Trust | Mfs Growth vs. Mfs California Municipal |
| Balanced Fund vs. All Asset Fund | Balanced Fund vs. HUMANA INC | Balanced Fund vs. Aquagold International | Balanced Fund vs. Barloworld Ltd ADR |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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