Correlation Between Mfs Value and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Small, you can compare the effects of market volatilities on Mfs Value and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Goldman Sachs.
Diversification Opportunities for Mfs Value and Goldman Sachs
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Goldman is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Small 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Small has no effect on the direction of Mfs Value i.e., Mfs Value and Goldman Sachs go up and down completely randomly.
Pair Corralation between Mfs Value and Goldman Sachs
Assuming the 90 days horizon Mfs Value is expected to generate 3.0 times less return on investment than Goldman Sachs. But when comparing it to its historical volatility, Mfs Value Fund is 2.32 times less risky than Goldman Sachs. It trades about 0.19 of its potential returns per unit of risk. Goldman Sachs Small is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 4,855 in Goldman Sachs Small on August 29, 2024 and sell it today you would earn a total of 449.00 from holding Goldman Sachs Small or generate 9.25% 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. Goldman Sachs Small
Performance |
| Timeline |
| Mfs Value Fund |
| Goldman Sachs Small |
Mfs Value and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Goldman Sachs
The main advantage of trading using opposite Mfs Value and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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