Correlation Between NYSE Composite and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mfs Growth 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 NYSE Composite and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mfs Growth Allocation, you can compare the effects of market volatilities on NYSE Composite and Mfs Growth 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 NYSE Composite with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mfs Growth.
Diversification Opportunities for NYSE Composite and Mfs Growth
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Mfs is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mfs Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Allocation and NYSE Composite 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 NYSE Composite are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Allocation has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mfs Growth go up and down completely randomly.
Pair Corralation between NYSE Composite and Mfs Growth
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.25 times more return on investment than Mfs Growth. However, NYSE Composite is 1.25 times more volatile than Mfs Growth Allocation. It trades about 0.24 of its potential returns per unit of risk. Mfs Growth Allocation is currently generating about 0.1 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mfs Growth Allocation
Performance |
| Timeline |
NYSE Composite and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mfs Growth Allocation
Pair trading matchups for Mfs Growth
Pair Trading with NYSE Composite and Mfs Growth
The main advantage of trading using opposite NYSE Composite and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| NYSE Composite vs. Glacier Bancorp | NYSE Composite vs. LithiumBank Resources Corp | NYSE Composite vs. Stepstone Group | NYSE Composite vs. Pintec Technology Holdings |
| Mfs Growth vs. Mfs Prudent Investor | Mfs Growth vs. Mfs Prudent Investor | Mfs Growth vs. Mfs Prudent Investor | Mfs Growth vs. Mfs Prudent Investor |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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