Correlation Between Sarofim Equity and Mfs Aggressive
Can any of the company-specific risk be diversified away by investing in both Sarofim Equity and Mfs Aggressive 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 Sarofim Equity and Mfs Aggressive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sarofim Equity and Mfs Aggressive Growth, you can compare the effects of market volatilities on Sarofim Equity and Mfs Aggressive 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 Sarofim Equity with a short position of Mfs Aggressive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sarofim Equity and Mfs Aggressive.
Diversification Opportunities for Sarofim Equity and Mfs Aggressive
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sarofim and Mfs is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sarofim Equity and Mfs Aggressive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Aggressive Growth and Sarofim Equity 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 Sarofim Equity are associated (or correlated) with Mfs Aggressive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Aggressive Growth has no effect on the direction of Sarofim Equity i.e., Sarofim Equity and Mfs Aggressive go up and down completely randomly.
Pair Corralation between Sarofim Equity and Mfs Aggressive
Assuming the 90 days horizon Sarofim Equity is expected to generate 1.26 times less return on investment than Mfs Aggressive. In addition to that, Sarofim Equity is 1.31 times more volatile than Mfs Aggressive Growth. It trades about 0.04 of its total potential returns per unit of risk. Mfs Aggressive Growth is currently generating about 0.06 per unit of volatility. If you would invest 2,493 in Mfs Aggressive Growth on September 4, 2024 and sell it today you would earn a total of 567.00 from holding Mfs Aggressive Growth or generate 22.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sarofim Equity vs. Mfs Aggressive Growth
Performance |
| Timeline |
| Sarofim Equity |
| Mfs Aggressive Growth |
Sarofim Equity and Mfs Aggressive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sarofim Equity and Mfs Aggressive
The main advantage of trading using opposite Sarofim Equity and Mfs Aggressive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sarofim Equity position performs unexpectedly, Mfs Aggressive 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 Aggressive will offset losses from the drop in Mfs Aggressive's long position.| Sarofim Equity vs. Global Technology Portfolio | Sarofim Equity vs. Fidelity Advisor Technology | Sarofim Equity vs. Allianzgi Technology Fund | Sarofim Equity vs. Hennessy Technology Fund |
| Mfs Aggressive vs. Scharf Global Opportunity | Mfs Aggressive vs. William Blair Large | Mfs Aggressive vs. Touchstone Large Cap | Mfs Aggressive vs. Growth Strategy 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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