Correlation Between Mfs New and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Mfs New and Mfs 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 New and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs New Discovery and Mfs Growth Fund, you can compare the effects of market volatilities on Mfs New and Mfs 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 New with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs New and Mfs Growth.
Diversification Opportunities for Mfs New and Mfs Growth
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs New Discovery and Mfs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Fund and Mfs New 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 New Discovery are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Fund has no effect on the direction of Mfs New i.e., Mfs New and Mfs Growth go up and down completely randomly.
Pair Corralation between Mfs New and Mfs Growth
Assuming the 90 days horizon Mfs New Discovery is expected to generate 1.11 times more return on investment than Mfs Growth. However, Mfs New is 1.11 times more volatile than Mfs Growth Fund. It trades about 0.27 of its potential returns per unit of risk. Mfs Growth Fund is currently generating about 0.13 per unit of risk. If you would invest 2,489 in Mfs New Discovery on August 26, 2024 and sell it today you would earn a total of 179.00 from holding Mfs New Discovery or generate 7.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs New Discovery vs. Mfs Growth Fund
Performance |
| Timeline |
| Mfs New Discovery |
| Mfs Growth Fund |
Mfs New and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs New and Mfs Growth
The main advantage of trading using opposite Mfs New and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs New position performs unexpectedly, Mfs 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 Mfs Growth will offset losses from the drop in Mfs Growth's long position.| Mfs New vs. Mfs Mid Cap | Mfs New vs. Massachusetts Investors Growth | Mfs New vs. Mfs Growth Fund | Mfs New vs. Mfs Value Fund |
| Mfs Growth vs. Massachusetts Investors Trust | Mfs Growth vs. Mfs Research Fund | Mfs Growth vs. Massachusetts Investors Growth | Mfs Growth vs. Mfs Value 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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