Correlation Between Mfs Growth and Mfs New
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and Mfs New 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 New 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 New Discovery, you can compare the effects of market volatilities on Mfs Growth and Mfs New 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 New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and Mfs New.
Diversification Opportunities for Mfs Growth and Mfs New
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery 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 New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Mfs Growth i.e., Mfs Growth and Mfs New go up and down completely randomly.
Pair Corralation between Mfs Growth and Mfs New
Assuming the 90 days horizon Mfs Growth Fund is expected to generate 0.96 times more return on investment than Mfs New. However, Mfs Growth Fund is 1.05 times less risky than Mfs New. It trades about 0.1 of its potential returns per unit of risk. Mfs New Discovery is currently generating about 0.05 per unit of risk. If you would invest 12,749 in Mfs Growth Fund on August 30, 2024 and sell it today you would earn a total of 8,091 from holding Mfs Growth Fund or generate 63.46% 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. Mfs New Discovery
Performance |
| Timeline |
| Mfs Growth Fund |
| Mfs New Discovery |
Mfs Growth and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and Mfs New
The main advantage of trading using opposite Mfs Growth and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, Mfs New 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 New will offset losses from the drop in Mfs New'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 New vs. Mfs Mid Cap | Mfs New vs. Massachusetts Investors Growth | Mfs New vs. Mfs Growth Fund | Mfs New vs. Mfs Value Fund |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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