Correlation Between Global Opportunity and Mfs Technology
Can any of the company-specific risk be diversified away by investing in both Global Opportunity and Mfs Technology 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 Global Opportunity and Mfs Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Opportunity Portfolio and Mfs Technology Fund, you can compare the effects of market volatilities on Global Opportunity and Mfs Technology 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 Global Opportunity with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Opportunity and Mfs Technology.
Diversification Opportunities for Global Opportunity and Mfs Technology
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Global and MFS is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Global Opportunity Portfolio and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Global Opportunity 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 Global Opportunity Portfolio are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Global Opportunity i.e., Global Opportunity and Mfs Technology go up and down completely randomly.
Pair Corralation between Global Opportunity and Mfs Technology
Assuming the 90 days horizon Global Opportunity Portfolio is expected to generate 0.75 times more return on investment than Mfs Technology. However, Global Opportunity Portfolio is 1.33 times less risky than Mfs Technology. It trades about 0.2 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.12 per unit of risk. If you would invest 3,356 in Global Opportunity Portfolio on August 29, 2024 and sell it today you would earn a total of 246.00 from holding Global Opportunity Portfolio or generate 7.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Opportunity Portfolio vs. Mfs Technology Fund
Performance |
| Timeline |
| Global Opportunity |
| Mfs Technology |
Global Opportunity and Mfs Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Opportunity and Mfs Technology
The main advantage of trading using opposite Global Opportunity and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Opportunity position performs unexpectedly, Mfs Technology 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 Technology will offset losses from the drop in Mfs Technology's long position.| Global Opportunity vs. Technology Ultrasector Profund | Global Opportunity vs. Mfs Technology Fund | Global Opportunity vs. Goldman Sachs Technology | Global Opportunity vs. Mfs Technology Fund |
| Mfs Technology vs. Red Oak Technology | Mfs Technology vs. Live Oak Health | Mfs Technology vs. HUMANA INC | Mfs Technology 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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