Correlation Between Mfs International and International Growth
Can any of the company-specific risk be diversified away by investing in both Mfs International and International 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 International and International Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International New and International Growth And, you can compare the effects of market volatilities on Mfs International and International 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 International with a short position of International Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and International Growth.
Diversification Opportunities for Mfs International and International Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and International is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International New and International Growth And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Growth And and Mfs International 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 International New are associated (or correlated) with International Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Growth And has no effect on the direction of Mfs International i.e., Mfs International and International Growth go up and down completely randomly.
Pair Corralation between Mfs International and International Growth
Assuming the 90 days horizon Mfs International New is expected to under-perform the International Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs International New is 1.25 times less risky than International Growth. The mutual fund trades about -0.33 of its potential returns per unit of risk. The International Growth And is currently generating about -0.2 of returns per unit of risk over similar time horizon. If you would invest 3,934 in International Growth And on August 28, 2024 and sell it today you would lose (232.00) from holding International Growth And or give up 5.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International New vs. International Growth And
Performance |
| Timeline |
| Mfs International New |
| International Growth And |
Mfs International and International Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and International Growth
The main advantage of trading using opposite Mfs International and International Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, International 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 International Growth will offset losses from the drop in International Growth's long position.| Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor |
| International Growth vs. Income Fund Of | International Growth vs. New World Fund | International Growth vs. American Mutual Fund | International Growth vs. American Mutual 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |