Correlation Between Mfs Research and Edgewood Growth
Can any of the company-specific risk be diversified away by investing in both Mfs Research and Edgewood 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 Research and Edgewood Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Research Fund and Edgewood Growth Fund, you can compare the effects of market volatilities on Mfs Research and Edgewood 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 Research with a short position of Edgewood Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Research and Edgewood Growth.
Diversification Opportunities for Mfs Research and Edgewood Growth
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Edgewood is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Research Fund and Edgewood Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edgewood Growth and Mfs Research 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 Research Fund are associated (or correlated) with Edgewood Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edgewood Growth has no effect on the direction of Mfs Research i.e., Mfs Research and Edgewood Growth go up and down completely randomly.
Pair Corralation between Mfs Research and Edgewood Growth
Assuming the 90 days horizon Mfs Research Fund is expected to generate 0.81 times more return on investment than Edgewood Growth. However, Mfs Research Fund is 1.23 times less risky than Edgewood Growth. It trades about 0.15 of its potential returns per unit of risk. Edgewood Growth Fund is currently generating about 0.12 per unit of risk. If you would invest 6,134 in Mfs Research Fund on October 26, 2024 and sell it today you would earn a total of 138.00 from holding Mfs Research Fund or generate 2.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Research Fund vs. Edgewood Growth Fund
Performance |
| Timeline |
| Mfs Research |
| Edgewood Growth |
Mfs Research and Edgewood Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Research and Edgewood Growth
The main advantage of trading using opposite Mfs Research and Edgewood Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Research position performs unexpectedly, Edgewood 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 Edgewood Growth will offset losses from the drop in Edgewood Growth's long position.| Mfs Research vs. Baron Health Care | Mfs Research vs. Health Care Ultrasector | Mfs Research vs. Invesco Global Health | Mfs Research vs. Alger Health Sciences |
| Edgewood Growth vs. John Hancock Disciplined | Edgewood Growth vs. Diamond Hill Large | Edgewood Growth vs. Hartford Schroders Emerging | Edgewood Growth vs. Oakmark International 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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