Correlation Between Mfs Growth and Massachusetts Investors
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and Massachusetts Investors 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 Massachusetts Investors 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 Massachusetts Investors Trust, you can compare the effects of market volatilities on Mfs Growth and Massachusetts Investors 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 Massachusetts Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and Massachusetts Investors.
Diversification Opportunities for Mfs Growth and Massachusetts Investors
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mfs and Massachusetts is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Massachusetts Investors Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Massachusetts Investors 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 Massachusetts Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Massachusetts Investors has no effect on the direction of Mfs Growth i.e., Mfs Growth and Massachusetts Investors go up and down completely randomly.
Pair Corralation between Mfs Growth and Massachusetts Investors
Assuming the 90 days horizon Mfs Growth Fund is expected to generate 1.5 times more return on investment than Massachusetts Investors. However, Mfs Growth is 1.5 times more volatile than Massachusetts Investors Trust. It trades about 0.11 of its potential returns per unit of risk. Massachusetts Investors Trust is currently generating about 0.16 per unit of risk. If you would invest 15,305 in Mfs Growth Fund on September 1, 2024 and sell it today you would earn a total of 5,537 from holding Mfs Growth Fund or generate 36.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Growth Fund vs. Massachusetts Investors Trust
Performance |
| Timeline |
| Mfs Growth Fund |
| Massachusetts Investors |
Mfs Growth and Massachusetts Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and Massachusetts Investors
The main advantage of trading using opposite Mfs Growth and Massachusetts Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, Massachusetts Investors 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 Massachusetts Investors will offset losses from the drop in Massachusetts Investors' 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 |
| Massachusetts Investors vs. Mfs Prudent Investor | Massachusetts Investors vs. Mfs Prudent Investor | Massachusetts Investors vs. Mfs Prudent Investor | Massachusetts Investors vs. Mfs Prudent Investor |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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