Correlation Between Mfs Technology and State Street
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and State Street 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 State Street 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 State Street Income, you can compare the effects of market volatilities on Mfs Technology and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and State Street.
Diversification Opportunities for Mfs Technology and State Street
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mfs and State is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and State Street Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Income 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Income has no effect on the direction of Mfs Technology i.e., Mfs Technology and State Street go up and down completely randomly.
Pair Corralation between Mfs Technology and State Street
Assuming the 90 days horizon Mfs Technology Fund is expected to under-perform the State Street. In addition to that, Mfs Technology is 5.81 times more volatile than State Street Income. It trades about -0.08 of its total potential returns per unit of risk. State Street Income is currently generating about -0.03 per unit of volatility. If you would invest 998.00 in State Street Income on January 7, 2025 and sell it today you would lose (17.00) from holding State Street Income or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.32% |
| Values | Daily Returns |
Mfs Technology Fund vs. State Street Income
Performance |
| Timeline |
| Mfs Technology |
| State Street Income |
Mfs Technology and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and State Street
The main advantage of trading using opposite Mfs Technology and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Mfs Technology vs. Goldman Sachs Global | Mfs Technology vs. Doubleline Global Bond | Mfs Technology vs. Siit Global Managed | Mfs Technology vs. Morningstar Global Income |
| State Street vs. State Street Target | State Street vs. State Street Target | State Street vs. Ssga International Stock | State Street vs. State Street Target |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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