Correlation Between Mfs Value and Locorr Market
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Locorr Market 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 Locorr Market 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 Locorr Market Trend, you can compare the effects of market volatilities on Mfs Value and Locorr Market 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 Locorr Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Locorr Market.
Diversification Opportunities for Mfs Value and Locorr Market
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mfs and Locorr is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Locorr Market Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Locorr Market Trend 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 Locorr Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Locorr Market Trend has no effect on the direction of Mfs Value i.e., Mfs Value and Locorr Market go up and down completely randomly.
Pair Corralation between Mfs Value and Locorr Market
Assuming the 90 days horizon Mfs Value Fund is expected to generate 0.74 times more return on investment than Locorr Market. However, Mfs Value Fund is 1.35 times less risky than Locorr Market. It trades about 0.07 of its potential returns per unit of risk. Locorr Market Trend is currently generating about -0.01 per unit of risk. If you would invest 4,451 in Mfs Value Fund on September 3, 2024 and sell it today you would earn a total of 1,121 from holding Mfs Value Fund or generate 25.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. Locorr Market Trend
Performance |
| Timeline |
| Mfs Value Fund |
| Locorr Market Trend |
Mfs Value and Locorr Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Locorr Market
The main advantage of trading using opposite Mfs Value and Locorr Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Locorr Market 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 Locorr Market will offset losses from the drop in Locorr Market's long position.| Mfs Value vs. Needham Aggressive Growth | Mfs Value vs. Ab Global Risk | Mfs Value vs. Lgm Risk Managed | Mfs Value vs. Multimanager Lifestyle Aggressive |
| Locorr Market vs. Aqr Managed Futures | Locorr Market vs. Pimco Trends Managed | Locorr Market vs. Pimco Trends Managed | Locorr Market vs. American Beacon Ahl |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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