Correlation Between Mfs Corporate and Mfs Value
Can any of the company-specific risk be diversified away by investing in both Mfs Corporate and Mfs Value 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 Corporate and Mfs Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Porate Bond and Mfs Value Fund, you can compare the effects of market volatilities on Mfs Corporate and Mfs Value 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 Corporate with a short position of Mfs Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Corporate and Mfs Value.
Diversification Opportunities for Mfs Corporate and Mfs Value
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Mfs is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Porate Bond and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund and Mfs Corporate 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 Porate Bond are associated (or correlated) with Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Mfs Corporate i.e., Mfs Corporate and Mfs Value go up and down completely randomly.
Pair Corralation between Mfs Corporate and Mfs Value
Assuming the 90 days horizon Mfs Porate Bond is expected to generate 0.52 times more return on investment than Mfs Value. However, Mfs Porate Bond is 1.92 times less risky than Mfs Value. It trades about 0.18 of its potential returns per unit of risk. Mfs Value Fund is currently generating about -0.04 per unit of risk. If you would invest 1,223 in Mfs Porate Bond on November 27, 2024 and sell it today you would earn a total of 13.00 from holding Mfs Porate Bond or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Porate Bond vs. Mfs Value Fund
Performance |
| Timeline |
| Mfs Porate Bond |
| Mfs Value Fund |
Mfs Corporate and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Corporate and Mfs Value
The main advantage of trading using opposite Mfs Corporate and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Corporate position performs unexpectedly, Mfs Value 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 Value will offset losses from the drop in Mfs Value's long position.| Mfs Corporate vs. Franklin Vertible Securities | Mfs Corporate vs. Putnam Vertible Securities | Mfs Corporate vs. Advent Claymore Convertible | Mfs Corporate vs. Gabelli Convertible And |
| Mfs Value vs. Mfs Total Return | Mfs Value vs. Mfs International Value | Mfs Value vs. Mfs Growth Fund | Mfs Value vs. Mfs International New |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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