Correlation Between Mfs Technology and Capital World
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Capital World 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 Capital World 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 Capital World Growth, you can compare the effects of market volatilities on Mfs Technology and Capital World 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 Capital World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Capital World.
Diversification Opportunities for Mfs Technology and Capital World
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Capital is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Capital World Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital World Growth 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 Capital World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital World Growth has no effect on the direction of Mfs Technology i.e., Mfs Technology and Capital World go up and down completely randomly.
Pair Corralation between Mfs Technology and Capital World
Assuming the 90 days horizon Mfs Technology Fund is expected to under-perform the Capital World. In addition to that, Mfs Technology is 1.75 times more volatile than Capital World Growth. It trades about -0.05 of its total potential returns per unit of risk. Capital World Growth is currently generating about 0.06 per unit of volatility. If you would invest 6,465 in Capital World Growth on November 27, 2024 and sell it today you would earn a total of 44.00 from holding Capital World Growth or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Technology Fund vs. Capital World Growth
Performance |
| Timeline |
| Mfs Technology |
| Capital World Growth |
Mfs Technology and Capital World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Capital World
The main advantage of trading using opposite Mfs Technology and Capital World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Capital World 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 Capital World will offset losses from the drop in Capital World's long position.| Mfs Technology vs. Tiaa Cref Funds | Mfs Technology vs. First American Funds | Mfs Technology vs. Dreyfus Institutional Reserves | Mfs Technology vs. Franklin Government Money |
| Capital World vs. Virtus Convertible | Capital World vs. The Gamco Global | Capital World vs. Lord Abbett Vertible | Capital World vs. Absolute Convertible Arbitrage |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |