Correlation Between Mfs Technology and First Eagle
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and First Eagle 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 Technology and First Eagle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Technology Fund and First Eagle Fund, you can compare the effects of market volatilities on Mfs Technology and First Eagle 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 Technology with a short position of First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and First Eagle.
Diversification Opportunities for Mfs Technology and First Eagle
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and First is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and First Eagle Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Fund and Mfs Technology 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 Technology Fund are associated (or correlated) with First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Fund has no effect on the direction of Mfs Technology i.e., Mfs Technology and First Eagle go up and down completely randomly.
Pair Corralation between Mfs Technology and First Eagle
Assuming the 90 days horizon Mfs Technology Fund is expected to generate 1.98 times more return on investment than First Eagle. However, Mfs Technology is 1.98 times more volatile than First Eagle Fund. It trades about 0.26 of its potential returns per unit of risk. First Eagle Fund is currently generating about 0.21 per unit of risk. If you would invest 4,900 in Mfs Technology Fund on September 1, 2024 and sell it today you would earn a total of 284.00 from holding Mfs Technology Fund or generate 5.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mfs Technology Fund vs. First Eagle Fund
Performance |
| Timeline |
| Mfs Technology |
| First Eagle Fund |
Mfs Technology and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and First Eagle
The main advantage of trading using opposite Mfs Technology and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Mfs Technology vs. Qs Moderate Growth | Mfs Technology vs. Transamerica Cleartrack Retirement | Mfs Technology vs. Franklin Lifesmart Retirement | Mfs Technology vs. Jp Morgan Smartretirement |
| First Eagle vs. Biotechnology Ultrasector Profund | First Eagle vs. Pgim Jennison Technology | First Eagle vs. Mfs Technology Fund | First Eagle vs. Janus Global Technology |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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