Correlation Between Mfs Mid and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Mfs Mid 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 Mfs Mid and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Mid Cap and Mfs Growth Allocation, you can compare the effects of market volatilities on Mfs Mid 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 Mfs Mid with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Mid and Mfs Growth.
Diversification Opportunities for Mfs Mid and Mfs Growth
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Mid Cap 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 Mfs Mid 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 Mid Cap 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 Mfs Mid i.e., Mfs Mid and Mfs Growth go up and down completely randomly.
Pair Corralation between Mfs Mid and Mfs Growth
Assuming the 90 days horizon Mfs Mid Cap is expected to generate 1.71 times more return on investment than Mfs Growth. However, Mfs Mid is 1.71 times more volatile than Mfs Growth Allocation. It trades about 0.12 of its potential returns per unit of risk. Mfs Growth Allocation is currently generating about 0.11 per unit of risk. If you would invest 2,988 in Mfs Mid Cap on September 1, 2024 and sell it today you would earn a total of 442.00 from holding Mfs Mid Cap or generate 14.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Mid Cap vs. Mfs Growth Allocation
Performance |
| Timeline |
| Mfs Mid Cap |
| Mfs Growth Allocation |
Mfs Mid and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Mid and Mfs Growth
The main advantage of trading using opposite Mfs Mid and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Mid 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.| Mfs Mid vs. Tax Managed Mid Small | Mfs Mid vs. Qs Small Capitalization | Mfs Mid vs. Champlain Small | Mfs Mid vs. Chartwell Small Cap |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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