Correlation Between Mfs International and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Mfs International and Icon Financial 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 Icon Financial 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 Icon Financial Fund, you can compare the effects of market volatilities on Mfs International and Icon Financial 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 Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Icon Financial.
Diversification Opportunities for Mfs International and Icon Financial
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and Icon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International New and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Mfs International i.e., Mfs International and Icon Financial go up and down completely randomly.
Pair Corralation between Mfs International and Icon Financial
Assuming the 90 days horizon Mfs International New is expected to under-perform the Icon Financial. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs International New is 2.07 times less risky than Icon Financial. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Icon Financial Fund is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,091 in Icon Financial Fund on August 28, 2024 and sell it today you would earn a total of 61.00 from holding Icon Financial Fund or generate 5.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International New vs. Icon Financial Fund
Performance |
| Timeline |
| Mfs International New |
| Icon Financial |
Mfs International and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Icon Financial
The main advantage of trading using opposite Mfs International and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial'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 |
| Icon Financial vs. Loomis Sayles Inflation | Icon Financial vs. Arrow Managed Futures | Icon Financial vs. Guidepath Managed Futures | Icon Financial vs. Western Asset Inflation |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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