Correlation Between Metropolitan West and Mfs Total
Can any of the company-specific risk be diversified away by investing in both Metropolitan West and Mfs Total 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 Metropolitan West and Mfs Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West Total and Mfs Total Return, you can compare the effects of market volatilities on Metropolitan West and Mfs Total 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 Metropolitan West with a short position of Mfs Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Mfs Total.
Diversification Opportunities for Metropolitan West and Mfs Total
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Metropolitan and Mfs is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West Total and Mfs Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Total Return and Metropolitan West 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 Metropolitan West Total are associated (or correlated) with Mfs Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Total Return has no effect on the direction of Metropolitan West i.e., Metropolitan West and Mfs Total go up and down completely randomly.
Pair Corralation between Metropolitan West and Mfs Total
Assuming the 90 days horizon Metropolitan West is expected to generate 1.34 times less return on investment than Mfs Total. In addition to that, Metropolitan West is 1.18 times more volatile than Mfs Total Return. It trades about 0.03 of its total potential returns per unit of risk. Mfs Total Return is currently generating about 0.05 per unit of volatility. If you would invest 870.00 in Mfs Total Return on September 12, 2024 and sell it today you would earn a total of 88.00 from holding Mfs Total Return or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West Total vs. Mfs Total Return
Performance |
| Timeline |
| Metropolitan West Total |
| Mfs Total Return |
Metropolitan West and Mfs Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Mfs Total
The main advantage of trading using opposite Metropolitan West and Mfs Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West position performs unexpectedly, Mfs Total 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 Mfs Total will offset losses from the drop in Mfs Total's long position.| Metropolitan West vs. Loomis Sayles Bond | Metropolitan West vs. Doubleline Total Return | Metropolitan West vs. Baird E Plus | Metropolitan West vs. Harbor International Fund |
| Mfs Total vs. Metropolitan West Total | Mfs Total vs. SCOR PK | Mfs Total vs. Morningstar Unconstrained Allocation | Mfs Total vs. Thrivent 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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