Correlation Between Mfs Total and Mfs Mid
Can any of the company-specific risk be diversified away by investing in both Mfs Total and Mfs Mid 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 Total and Mfs Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Total Return and Mfs Mid Cap, you can compare the effects of market volatilities on Mfs Total and Mfs Mid 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 Total with a short position of Mfs Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Total and Mfs Mid.
Diversification Opportunities for Mfs Total and Mfs Mid
Excellent diversification
The 3 months correlation between Mfs and Mfs is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Total Return and Mfs Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Mid Cap and Mfs Total 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 Total Return are associated (or correlated) with Mfs Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Mid Cap has no effect on the direction of Mfs Total i.e., Mfs Total and Mfs Mid go up and down completely randomly.
Pair Corralation between Mfs Total and Mfs Mid
Assuming the 90 days horizon Mfs Total is expected to generate 3.55 times less return on investment than Mfs Mid. But when comparing it to its historical volatility, Mfs Total Return is 2.23 times less risky than Mfs Mid. It trades about 0.04 of its potential returns per unit of risk. Mfs Mid Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,806 in Mfs Mid Cap on September 1, 2024 and sell it today you would earn a total of 849.00 from holding Mfs Mid Cap or generate 30.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Total Return vs. Mfs Mid Cap
Performance |
| Timeline |
| Mfs Total Return |
| Mfs Mid Cap |
Mfs Total and Mfs Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Total and Mfs Mid
The main advantage of trading using opposite Mfs Total and Mfs Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Total position performs unexpectedly, Mfs Mid 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 Mid will offset losses from the drop in Mfs Mid's long position.| Mfs Total vs. Mfs Prudent Investor | Mfs Total vs. Mfs Prudent Investor | Mfs Total vs. Mfs Prudent Investor | Mfs Total vs. Mfs Prudent Investor |
| Mfs Mid vs. Mfs Growth Fund | Mfs Mid vs. Mfs Value Fund | Mfs Mid vs. Mfs International Diversification | Mfs Mid vs. Mid Cap 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |