Correlation Between Mfs Value and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Mfs Value and Old Westbury 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 Value and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and Old Westbury Municipal, you can compare the effects of market volatilities on Mfs Value and Old Westbury 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 Value with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and Old Westbury.
Diversification Opportunities for Mfs Value and Old Westbury
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and Old is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal and Mfs Value 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 Value Fund are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Mfs Value i.e., Mfs Value and Old Westbury go up and down completely randomly.
Pair Corralation between Mfs Value and Old Westbury
Assuming the 90 days horizon Mfs Value Fund is expected to generate 2.77 times more return on investment than Old Westbury. However, Mfs Value is 2.77 times more volatile than Old Westbury Municipal. It trades about 0.19 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.28 per unit of risk. If you would invest 4,952 in Mfs Value Fund on November 9, 2024 and sell it today you would earn a total of 18.00 from holding Mfs Value Fund or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 20.0% |
| Values | Daily Returns |
Mfs Value Fund vs. Old Westbury Municipal
Performance |
| Timeline |
| Mfs Value Fund |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| Old Westbury Municipal |
Mfs Value and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and Old Westbury
The main advantage of trading using opposite Mfs Value and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Mfs Value vs. Doubleline Total Return | Mfs Value vs. Federated Muni And | Mfs Value vs. Ab Bond Inflation | Mfs Value vs. Ab Bond Inflation |
| Old Westbury vs. High Yield Fund | Old Westbury vs. Siit High Yield | Old Westbury vs. Lord Abbett Short | Old Westbury vs. Dunham High Yield |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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