Correlation Between Metropolitan West and Mfs International
Can any of the company-specific risk be diversified away by investing in both Metropolitan West and Mfs International 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 International 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 International Diversification, you can compare the effects of market volatilities on Metropolitan West and Mfs International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Mfs International.
Diversification Opportunities for Metropolitan West and Mfs International
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Metropolitan and Mfs is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West Total and Mfs International Diversificat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International has no effect on the direction of Metropolitan West i.e., Metropolitan West and Mfs International go up and down completely randomly.
Pair Corralation between Metropolitan West and Mfs International
Assuming the 90 days horizon Metropolitan West is expected to generate 2.15 times less return on investment than Mfs International. But when comparing it to its historical volatility, Metropolitan West Total is 1.55 times less risky than Mfs International. It trades about 0.04 of its potential returns per unit of risk. Mfs International Diversification is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,016 in Mfs International Diversification on November 27, 2024 and sell it today you would earn a total of 417.00 from holding Mfs International Diversification or generate 20.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West Total vs. Mfs International Diversificat
Performance |
| Timeline |
| Metropolitan West Total |
| Mfs International |
Metropolitan West and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Mfs International
The main advantage of trading using opposite Metropolitan West and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Metropolitan West vs. Needham Small Cap | Metropolitan West vs. Ep Emerging Markets | Metropolitan West vs. Goldman Sachs Small | Metropolitan West vs. Nuveen Small Cap |
| Mfs International vs. Franklin Dynatech Fund | Mfs International vs. John Hancock Bond | Mfs International vs. Prudential Total Return | Mfs International vs. Mfs Growth Fund |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |