Correlation Between Mfs Technology and Global Technology
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Global Technology 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 Global Technology 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 Global Technology Portfolio, you can compare the effects of market volatilities on Mfs Technology and Global Technology 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 Global Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Global Technology.
Diversification Opportunities for Mfs Technology and Global Technology
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Global is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Global Technology Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Technology 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 Global Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Technology has no effect on the direction of Mfs Technology i.e., Mfs Technology and Global Technology go up and down completely randomly.
Pair Corralation between Mfs Technology and Global Technology
Assuming the 90 days horizon Mfs Technology is expected to generate 1.03 times less return on investment than Global Technology. In addition to that, Mfs Technology is 1.11 times more volatile than Global Technology Portfolio. It trades about 0.11 of its total potential returns per unit of risk. Global Technology Portfolio is currently generating about 0.12 per unit of volatility. If you would invest 2,075 in Global Technology Portfolio on August 28, 2024 and sell it today you would earn a total of 63.00 from holding Global Technology Portfolio or generate 3.04% 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. Global Technology Portfolio
Performance |
| Timeline |
| Mfs Technology |
| Global Technology |
Mfs Technology and Global Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Global Technology
The main advantage of trading using opposite Mfs Technology and Global Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Global Technology 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 Global Technology will offset losses from the drop in Global Technology's long position.| Mfs Technology vs. Firsthand Technology Opportunities | Mfs Technology vs. Invesco Technology Fund | Mfs Technology vs. Global Technology Portfolio | Mfs Technology vs. Technology Ultrasector Profund |
| Global Technology vs. Firsthand Technology Opportunities | Global Technology vs. Invesco Technology Fund | Global Technology vs. Mfs Technology Fund | Global Technology vs. Technology Ultrasector Profund |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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