Correlation Between Mfs Total and Mfs Research
Can any of the company-specific risk be diversified away by investing in both Mfs Total and Mfs Research 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 Research 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 Research Fund, you can compare the effects of market volatilities on Mfs Total and Mfs Research 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 Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Total and Mfs Research.
Diversification Opportunities for Mfs Total and Mfs Research
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Mfs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Total Return and Mfs Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research 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 Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research has no effect on the direction of Mfs Total i.e., Mfs Total and Mfs Research go up and down completely randomly.
Pair Corralation between Mfs Total and Mfs Research
Assuming the 90 days horizon Mfs Total is expected to generate 2.9 times less return on investment than Mfs Research. But when comparing it to its historical volatility, Mfs Total Return is 1.47 times less risky than Mfs Research. It trades about 0.05 of its potential returns per unit of risk. Mfs Research Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,522 in Mfs Research Fund on August 26, 2024 and sell it today you would earn a total of 1,944 from holding Mfs Research Fund or generate 42.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Total Return vs. Mfs Research Fund
Performance |
| Timeline |
| Mfs Total Return |
| Mfs Research |
Mfs Total and Mfs Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Total and Mfs Research
The main advantage of trading using opposite Mfs Total and Mfs Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Total position performs unexpectedly, Mfs Research 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 Research will offset losses from the drop in Mfs Research's long position.| Mfs Total vs. Aqr Large Cap | Mfs Total vs. Quantitative U S | Mfs Total vs. Old Westbury Large | Mfs Total vs. Alternative Asset Allocation |
| Mfs Research vs. Mfs Growth Fund | Mfs Research vs. Massachusetts Investors Trust | Mfs Research vs. Mfs Total Return | Mfs Research vs. Massachusetts Investors 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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