Correlation Between Mfs Utilities and Mfs Technology
Can any of the company-specific risk be diversified away by investing in both Mfs Utilities 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 Mfs Utilities and Mfs Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Utilities Fund and Mfs Technology Fund, you can compare the effects of market volatilities on Mfs Utilities 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 Mfs Utilities with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Utilities and Mfs Technology.
Diversification Opportunities for Mfs Utilities and Mfs Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and Mfs is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Utilities Fund and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Mfs Utilities 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 Utilities Fund 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 Mfs Utilities i.e., Mfs Utilities and Mfs Technology go up and down completely randomly.
Pair Corralation between Mfs Utilities and Mfs Technology
Assuming the 90 days horizon Mfs Utilities is expected to generate 1.71 times less return on investment than Mfs Technology. But when comparing it to its historical volatility, Mfs Utilities Fund is 1.2 times less risky than Mfs Technology. It trades about 0.18 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 7,623 in Mfs Technology Fund on September 1, 2024 and sell it today you would earn a total of 449.00 from holding Mfs Technology Fund or generate 5.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Utilities Fund vs. Mfs Technology Fund
Performance |
| Timeline |
| Mfs Utilities |
| Mfs Technology |
Mfs Utilities and Mfs Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Utilities and Mfs Technology
The main advantage of trading using opposite Mfs Utilities and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Utilities 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.| Mfs Utilities vs. Janus Global Technology | Mfs Utilities vs. Icon Information Technology | Mfs Utilities vs. Technology Ultrasector Profund | Mfs Utilities vs. Blackrock Science Technology |
| Mfs Technology vs. Touchstone Premium Yield | Mfs Technology vs. Artisan High Income | Mfs Technology vs. T Rowe Price | Mfs Technology vs. Thrivent Income 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |