Correlation Between Mfs Technology and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Technology, you can compare the effects of market volatilities on Mfs Technology and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Goldman Sachs.
Diversification Opportunities for Mfs Technology and Goldman Sachs
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Goldman is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Goldman Sachs Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Technology has no effect on the direction of Mfs Technology i.e., Mfs Technology and Goldman Sachs go up and down completely randomly.
Pair Corralation between Mfs Technology and Goldman Sachs
Assuming the 90 days horizon Mfs Technology Fund is expected to under-perform the Goldman Sachs. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Technology Fund is 1.09 times less risky than Goldman Sachs. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Goldman Sachs Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,546 in Goldman Sachs Technology on November 27, 2024 and sell it today you would earn a total of 68.00 from holding Goldman Sachs Technology or generate 1.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Technology Fund vs. Goldman Sachs Technology
Performance |
| Timeline |
| Mfs Technology |
| Goldman Sachs Technology |
Mfs Technology and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Goldman Sachs
The main advantage of trading using opposite Mfs Technology and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' 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 |
| Goldman Sachs vs. Pace International Emerging | Goldman Sachs vs. Commodities Strategy Fund | Goldman Sachs vs. Pace International Emerging | Goldman Sachs vs. Investec Emerging Markets |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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