Correlation Between Mfs Value and Mfs Blended
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Mfs Blended 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 Blended 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 Blended Research, you can compare the effects of market volatilities on Mfs Value and Mfs Blended 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 Blended. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Mfs Blended.
Diversification Opportunities for Mfs Value and Mfs Blended
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Mfs Blended Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Blended Research 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 Blended. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Blended Research has no effect on the direction of Mfs Value i.e., Mfs Value and Mfs Blended go up and down completely randomly.
Pair Corralation between Mfs Value and Mfs Blended
Assuming the 90 days horizon Mfs Value is expected to generate 1.35 times less return on investment than Mfs Blended. But when comparing it to its historical volatility, Mfs Value Fund is 1.53 times less risky than Mfs Blended. It trades about 0.18 of its potential returns per unit of risk. Mfs Blended Research is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 2,383 in Mfs Blended Research on August 28, 2024 and sell it today you would earn a total of 97.00 from holding Mfs Blended Research or generate 4.07% 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 Blended Research
Performance |
| Timeline |
| Mfs Value Fund |
| Mfs Blended Research |
Mfs Value and Mfs Blended Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Mfs Blended
The main advantage of trading using opposite Mfs Value and Mfs Blended positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Mfs Blended 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 Blended will offset losses from the drop in Mfs Blended'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 Blended vs. Mfs Value Fund | Mfs Blended vs. Mfs International Value | Mfs Blended vs. Mfs International Diversification | Mfs Blended vs. John Hancock Disciplined |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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