Correlation Between Mfs Value and Mfs Total
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Mfs Total 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 Value and Mfs Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and Mfs Total Return, you can compare the effects of market volatilities on Mfs Value and Mfs Total 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 Value with a short position of Mfs Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Mfs Total.
Diversification Opportunities for Mfs Value and Mfs Total
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Mfs Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Total Return and Mfs Value 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 Value Fund are associated (or correlated) with Mfs Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Total Return has no effect on the direction of Mfs Value i.e., Mfs Value and Mfs Total go up and down completely randomly.
Pair Corralation between Mfs Value and Mfs Total
Assuming the 90 days horizon Mfs Value Fund is expected to generate 1.25 times more return on investment than Mfs Total. However, Mfs Value is 1.25 times more volatile than Mfs Total Return. It trades about 0.1 of its potential returns per unit of risk. Mfs Total Return is currently generating about 0.07 per unit of risk. If you would invest 4,494 in Mfs Value Fund on August 26, 2024 and sell it today you would earn a total of 1,018 from holding Mfs Value Fund or generate 22.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. Mfs Total Return
Performance |
| Timeline |
| Mfs Value Fund |
| Mfs Total Return |
Mfs Value and Mfs Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Mfs Total
The main advantage of trading using opposite Mfs Value and Mfs Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Mfs Total 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 Total will offset losses from the drop in Mfs Total's long position.| Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor |
| Mfs Total vs. Amg River Road | Mfs Total vs. Pace Smallmedium Value | Mfs Total vs. Vanguard Small Cap Value | Mfs Total vs. Ultrasmall Cap Profund Ultrasmall Cap |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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