Correlation Between Mfs International and Mfs Value
Can any of the company-specific risk be diversified away by investing in both Mfs International and Mfs Value 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 Mfs Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Large and Mfs Value Fund, you can compare the effects of market volatilities on Mfs International and Mfs Value 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 Mfs Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Mfs Value.
Diversification Opportunities for Mfs International and Mfs Value
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and Mfs is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Large and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund 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 Large are associated (or correlated) with Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Mfs International i.e., Mfs International and Mfs Value go up and down completely randomly.
Pair Corralation between Mfs International and Mfs Value
Assuming the 90 days horizon Mfs International is expected to generate 1.48 times less return on investment than Mfs Value. In addition to that, Mfs International is 1.17 times more volatile than Mfs Value Fund. It trades about 0.05 of its total potential returns per unit of risk. Mfs Value Fund is currently generating about 0.08 per unit of volatility. If you would invest 4,345 in Mfs Value Fund on September 1, 2024 and sell it today you would earn a total of 1,226 from holding Mfs Value Fund or generate 28.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs International Large vs. Mfs Value Fund
Performance |
| Timeline |
| Mfs International Large |
| Mfs Value Fund |
Mfs International and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs International and Mfs Value
The main advantage of trading using opposite Mfs International and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Mfs Value 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 Value will offset losses from the drop in Mfs Value'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 |
| Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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