Correlation Between Mfs Growth and Mfs Corporate
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and Mfs Corporate 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 Growth and Mfs Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Growth Fund and Mfs Porate Bond, you can compare the effects of market volatilities on Mfs Growth and Mfs Corporate 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 Growth with a short position of Mfs Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and Mfs Corporate.
Diversification Opportunities for Mfs Growth and Mfs Corporate
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mfs and Mfs is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Mfs Porate Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Porate Bond and Mfs Growth 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 Growth Fund are associated (or correlated) with Mfs Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Porate Bond has no effect on the direction of Mfs Growth i.e., Mfs Growth and Mfs Corporate go up and down completely randomly.
Pair Corralation between Mfs Growth and Mfs Corporate
Assuming the 90 days horizon Mfs Growth Fund is expected to generate 2.4 times more return on investment than Mfs Corporate. However, Mfs Growth is 2.4 times more volatile than Mfs Porate Bond. It trades about 0.3 of its potential returns per unit of risk. Mfs Porate Bond is currently generating about 0.1 per unit of risk. If you would invest 19,638 in Mfs Growth Fund on September 1, 2024 and sell it today you would earn a total of 1,204 from holding Mfs Growth Fund or generate 6.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Growth Fund vs. Mfs Porate Bond
Performance |
| Timeline |
| Mfs Growth Fund |
| Mfs Porate Bond |
Mfs Growth and Mfs Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and Mfs Corporate
The main advantage of trading using opposite Mfs Growth and Mfs Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, Mfs Corporate 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 Corporate will offset losses from the drop in Mfs Corporate's long position.| Mfs Growth vs. Massachusetts Investors Trust | Mfs Growth vs. Mfs Research Fund | Mfs Growth vs. Massachusetts Investors Growth | Mfs Growth vs. Mfs Value Fund |
| Mfs Corporate vs. T Rowe Price | Mfs Corporate vs. Rbc Funds Trust | Mfs Corporate vs. Issachar Fund Class | Mfs Corporate vs. Shelton Funds |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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