Correlation Between Mfs Research and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Mfs Research and Mfs Growth 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 Research and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Research Fund and Mfs Growth Fund, you can compare the effects of market volatilities on Mfs Research and Mfs Growth 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 Research with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Research and Mfs Growth.
Diversification Opportunities for Mfs Research and Mfs Growth
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Research Fund and Mfs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Fund and Mfs Research 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 Research Fund are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Fund has no effect on the direction of Mfs Research i.e., Mfs Research and Mfs Growth go up and down completely randomly.
Pair Corralation between Mfs Research and Mfs Growth
Assuming the 90 days horizon Mfs Research is expected to generate 1.76 times less return on investment than Mfs Growth. But when comparing it to its historical volatility, Mfs Research Fund is 1.33 times less risky than Mfs Growth. It trades about 0.05 of its potential returns per unit of risk. Mfs Growth Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 13,314 in Mfs Growth Fund on November 2, 2024 and sell it today you would earn a total of 5,732 from holding Mfs Growth Fund or generate 43.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Research Fund vs. Mfs Growth Fund
Performance |
| Timeline |
| Mfs Research |
| Mfs Growth Fund |
Mfs Research and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Research and Mfs Growth
The main advantage of trading using opposite Mfs Research and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Research position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| Mfs Research vs. Columbia Large Cap | Mfs Research vs. Columbia Capital Allocation | Mfs Research vs. HUMANA INC | Mfs Research vs. Aquagold International |
| Mfs Growth vs. Massachusetts Investors Trust | Mfs Growth vs. Mfs Research Fund | Mfs Growth vs. Massachusetts Investors Growth | Mfs Growth 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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