Correlation Between MFS Special and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MFS Special and Dow Jones 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 Special and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Special Value and Dow Jones Industrial, you can compare the effects of market volatilities on MFS Special and Dow Jones 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 Special with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Special and Dow Jones.
Diversification Opportunities for MFS Special and Dow Jones
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFS and Dow is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding MFS Special Value and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and MFS Special 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 Special Value are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of MFS Special i.e., MFS Special and Dow Jones go up and down completely randomly.
Pair Corralation between MFS Special and Dow Jones
Considering the 90-day investment horizon MFS Special Value is expected to generate 0.94 times more return on investment than Dow Jones. However, MFS Special Value is 1.06 times less risky than Dow Jones. It trades about 0.12 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 402.00 in MFS Special Value on August 31, 2024 and sell it today you would earn a total of 10.00 from holding MFS Special Value or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.56% |
| Values | Daily Returns |
MFS Special Value vs. Dow Jones Industrial
Performance |
| Timeline |
MFS Special and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MFS Special Value
Pair trading matchups for MFS Special
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MFS Special and Dow Jones
The main advantage of trading using opposite MFS Special and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Special position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| MFS Special vs. Brookfield Business Corp | MFS Special vs. Elysee Development Corp | MFS Special vs. DWS Municipal Income | MFS Special vs. Blackrock Munivest |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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