Correlation Between Massachusetts Investors and Mfs Research
Can any of the company-specific risk be diversified away by investing in both Massachusetts Investors and Mfs Research 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 Massachusetts Investors and Mfs Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Massachusetts Investors Trust and Mfs Research Fund, you can compare the effects of market volatilities on Massachusetts Investors and Mfs Research 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 Massachusetts Investors with a short position of Mfs Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Massachusetts Investors and Mfs Research.
Diversification Opportunities for Massachusetts Investors and Mfs Research
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Massachusetts and Mfs is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Massachusetts Investors Trust and Mfs Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research and Massachusetts Investors 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 Massachusetts Investors Trust are associated (or correlated) with Mfs Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research has no effect on the direction of Massachusetts Investors i.e., Massachusetts Investors and Mfs Research go up and down completely randomly.
Pair Corralation between Massachusetts Investors and Mfs Research
Assuming the 90 days horizon Massachusetts Investors Trust is expected to generate 0.97 times more return on investment than Mfs Research. However, Massachusetts Investors Trust is 1.03 times less risky than Mfs Research. It trades about 0.13 of its potential returns per unit of risk. Mfs Research Fund is currently generating about 0.07 per unit of risk. If you would invest 3,632 in Massachusetts Investors Trust on October 23, 2024 and sell it today you would earn a total of 69.00 from holding Massachusetts Investors Trust or generate 1.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 94.74% |
| Values | Daily Returns |
Massachusetts Investors Trust vs. Mfs Research Fund
Performance |
| Timeline |
| Massachusetts Investors |
| Mfs Research |
Massachusetts Investors and Mfs Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Massachusetts Investors and Mfs Research
The main advantage of trading using opposite Massachusetts Investors and Mfs Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Massachusetts Investors position performs unexpectedly, Mfs Research 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 Research will offset losses from the drop in Mfs Research's long position.The idea behind Massachusetts Investors Trust and Mfs Research Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Mfs Research vs. Mfs Growth Fund | Mfs Research vs. Massachusetts Investors Trust | Mfs Research vs. Mfs Total Return | Mfs Research vs. Massachusetts Investors Growth |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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