Correlation Between Mfs Technology and Oppenheimer
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Oppenheimer 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 Oppenheimer 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 Oppenheimer Gr Incm, you can compare the effects of market volatilities on Mfs Technology and Oppenheimer 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 Oppenheimer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Oppenheimer.
Diversification Opportunities for Mfs Technology and Oppenheimer
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Oppenheimer is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Oppenheimer Gr Incm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oppenheimer Gr Incm 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 Oppenheimer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oppenheimer Gr Incm has no effect on the direction of Mfs Technology i.e., Mfs Technology and Oppenheimer go up and down completely randomly.
Pair Corralation between Mfs Technology and Oppenheimer
Assuming the 90 days horizon Mfs Technology Fund is expected to generate 1.33 times more return on investment than Oppenheimer. However, Mfs Technology is 1.33 times more volatile than Oppenheimer Gr Incm. It trades about -0.05 of its potential returns per unit of risk. Oppenheimer Gr Incm is currently generating about -0.29 per unit of risk. If you would invest 7,335 in Mfs Technology Fund on November 27, 2024 and sell it today you would lose (83.00) from holding Mfs Technology Fund or give up 1.13% 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. Oppenheimer Gr Incm
Performance |
| Timeline |
| Mfs Technology |
| Oppenheimer Gr Incm |
Mfs Technology and Oppenheimer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Oppenheimer
The main advantage of trading using opposite Mfs Technology and Oppenheimer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Oppenheimer 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 Oppenheimer will offset losses from the drop in Oppenheimer'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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