Correlation Between Mfs Technology and Global Opportunity
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Global Opportunity 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 Opportunity 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 Opportunity Portfolio, you can compare the effects of market volatilities on Mfs Technology and Global Opportunity 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 Opportunity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Global Opportunity.
Diversification Opportunities for Mfs Technology and Global Opportunity
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Global is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Global Opportunity Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Opportunity 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 Opportunity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Opportunity has no effect on the direction of Mfs Technology i.e., Mfs Technology and Global Opportunity go up and down completely randomly.
Pair Corralation between Mfs Technology and Global Opportunity
Assuming the 90 days horizon Mfs Technology Fund is expected to generate 1.67 times more return on investment than Global Opportunity. However, Mfs Technology is 1.67 times more volatile than Global Opportunity Portfolio. It trades about 0.26 of its potential returns per unit of risk. Global Opportunity Portfolio is currently generating about 0.41 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. Global Opportunity Portfolio
Performance |
| Timeline |
| Mfs Technology |
| Global Opportunity |
Mfs Technology and Global Opportunity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Global Opportunity
The main advantage of trading using opposite Mfs Technology and Global Opportunity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Global Opportunity 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 Opportunity will offset losses from the drop in Global Opportunity'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 |
| Global Opportunity vs. Emerging Markets Equity | Global Opportunity vs. Global Fixed Income | Global Opportunity vs. Global Fixed Income | Global Opportunity vs. Global Fixed Income |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |