Correlation Between Mfs Growth and Prudential Total
Can any of the company-specific risk be diversified away by investing in both Mfs Growth and Prudential Total 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 Prudential Total 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 Prudential Total Return, you can compare the effects of market volatilities on Mfs Growth and Prudential Total 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 Prudential Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Growth and Prudential Total.
Diversification Opportunities for Mfs Growth and Prudential Total
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mfs and Prudential is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Prudential Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Total Return 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 Prudential Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Total Return has no effect on the direction of Mfs Growth i.e., Mfs Growth and Prudential Total go up and down completely randomly.
Pair Corralation between Mfs Growth and Prudential Total
Assuming the 90 days horizon Mfs Growth Fund is expected to generate 3.02 times more return on investment than Prudential Total. However, Mfs Growth is 3.02 times more volatile than Prudential Total Return. It trades about 0.13 of its potential returns per unit of risk. Prudential Total Return is currently generating about 0.12 per unit of risk. If you would invest 15,864 in Mfs Growth Fund on August 25, 2024 and sell it today you would earn a total of 6,868 from holding Mfs Growth Fund or generate 43.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.63% |
| Values | Daily Returns |
Mfs Growth Fund vs. Prudential Total Return
Performance |
| Timeline |
| Mfs Growth Fund |
| Prudential Total Return |
Mfs Growth and Prudential Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Growth and Prudential Total
The main advantage of trading using opposite Mfs Growth and Prudential Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Growth position performs unexpectedly, Prudential Total 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 Prudential Total will offset losses from the drop in Prudential Total's long position.| Mfs Growth vs. Mfs Value Fund | Mfs Growth vs. Mfs International Value | Mfs Growth vs. Mfs International Diversification | Mfs Growth vs. John Hancock Disciplined |
| Prudential Total vs. John Hancock Bond | Prudential Total vs. Mfs International Diversification | Prudential Total vs. Mfs Growth Fund | Prudential Total vs. Aquagold International |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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