Correlation Between Mfs Technology and Mfs Union
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Mfs Union 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 Mfs Union 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 Mfs Union Standard, you can compare the effects of market volatilities on Mfs Technology and Mfs Union 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 Mfs Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Mfs Union.
Diversification Opportunities for Mfs Technology and Mfs Union
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Mfs Union Standard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Union Standard 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 Mfs Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Union Standard has no effect on the direction of Mfs Technology i.e., Mfs Technology and Mfs Union go up and down completely randomly.
Pair Corralation between Mfs Technology and Mfs Union
Assuming the 90 days horizon Mfs Technology Fund is expected to under-perform the Mfs Union. In addition to that, Mfs Technology is 1.9 times more volatile than Mfs Union Standard. It trades about -0.1 of its total potential returns per unit of risk. Mfs Union Standard is currently generating about -0.12 per unit of volatility. If you would invest 3,985 in Mfs Union Standard on October 19, 2024 and sell it today you would lose (317.00) from holding Mfs Union Standard or give up 7.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Technology Fund vs. Mfs Union Standard
Performance |
| Timeline |
| Mfs Technology |
| Mfs Union Standard |
Mfs Technology and Mfs Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Mfs Union
The main advantage of trading using opposite Mfs Technology and Mfs Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Mfs Union 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 Union will offset losses from the drop in Mfs Union's long position.| Mfs Technology vs. Jp Morgan Smartretirement | Mfs Technology vs. Putnman Retirement Ready | Mfs Technology vs. College Retirement Equities | Mfs Technology vs. Blackrock Moderate Prepared |
| Mfs Union vs. Invesco Technology Fund | Mfs Union vs. Technology Ultrasector Profund | Mfs Union vs. Mfs Technology Fund | Mfs Union vs. Vanguard Information 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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