Correlation Between Mfs Research and Mfs International
Can any of the company-specific risk be diversified away by investing in both Mfs Research and Mfs International 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 Mfs International 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 Mfs International Growth, you can compare the effects of market volatilities on Mfs Research and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Research and Mfs International.
Diversification Opportunities for Mfs Research and Mfs International
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Mfs and Mfs is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Research Fund and Mfs International Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Growth has no effect on the direction of Mfs Research i.e., Mfs Research and Mfs International go up and down completely randomly.
Pair Corralation between Mfs Research and Mfs International
Assuming the 90 days horizon Mfs Research Fund is expected to generate 1.01 times more return on investment than Mfs International. However, Mfs Research is 1.01 times more volatile than Mfs International Growth. It trades about 0.1 of its potential returns per unit of risk. Mfs International Growth is currently generating about 0.06 per unit of risk. If you would invest 4,562 in Mfs Research Fund on August 30, 2024 and sell it today you would earn a total of 2,197 from holding Mfs Research Fund or generate 48.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Research Fund vs. Mfs International Growth
Performance |
| Timeline |
| Mfs Research |
| Mfs International Growth |
Mfs Research and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Research and Mfs International
The main advantage of trading using opposite Mfs Research and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Research position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Mfs Research vs. Vanguard Total Stock | Mfs Research vs. Vanguard 500 Index | Mfs Research vs. Vanguard Total Stock | Mfs Research vs. Vanguard Total Stock |
| Mfs International vs. Europacific Growth Fund | Mfs International vs. Europacific Growth Fund | Mfs International vs. Europacific Growth Fund | Mfs International vs. Europacific Growth 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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