Correlation Between Mfs Series and Madison Investors
Can any of the company-specific risk be diversified away by investing in both Mfs Series and Madison 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 Series and Madison Investors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Series Trust and Madison Investors Fund, you can compare the effects of market volatilities on Mfs Series and Madison 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 Series with a short position of Madison Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Series and Madison Investors.
Diversification Opportunities for Mfs Series and Madison Investors
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Madison is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Series Trust and Madison Investors Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Madison Investors and Mfs Series 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 Series Trust are associated (or correlated) with Madison Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Madison Investors has no effect on the direction of Mfs Series i.e., Mfs Series and Madison Investors go up and down completely randomly.
Pair Corralation between Mfs Series and Madison Investors
Assuming the 90 days horizon Mfs Series Trust is expected to generate 0.78 times more return on investment than Madison Investors. However, Mfs Series Trust is 1.28 times less risky than Madison Investors. It trades about 0.12 of its potential returns per unit of risk. Madison Investors Fund is currently generating about 0.09 per unit of risk. If you would invest 1,040 in Mfs Series Trust on November 4, 2024 and sell it today you would earn a total of 124.00 from holding Mfs Series Trust or generate 11.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Series Trust vs. Madison Investors Fund
Performance |
| Timeline |
| Mfs Series Trust |
| Madison Investors |
Mfs Series and Madison Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Series and Madison Investors
The main advantage of trading using opposite Mfs Series and Madison Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Series position performs unexpectedly, Madison 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 Madison Investors will offset losses from the drop in Madison Investors' long position.| Mfs Series vs. Voya Government Money | Mfs Series vs. Financials Ultrasector Profund | Mfs Series vs. Prudential Financial Services | Mfs Series vs. Rmb Mendon Financial |
| Madison Investors vs. Matrix Advisors Value | Madison Investors vs. Madison Mid Cap | Madison Investors vs. Fam Value Fund | Madison Investors vs. Sound Shore 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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