Correlation Between Extended Market and Mfs Value
Can any of the company-specific risk be diversified away by investing in both Extended Market and Mfs Value 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 Extended Market and Mfs Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extended Market Index and Mfs Value Fund, you can compare the effects of market volatilities on Extended Market and Mfs Value 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 Extended Market with a short position of Mfs Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extended Market and Mfs Value.
Diversification Opportunities for Extended Market and Mfs Value
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Extended and Mfs is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Extended Market Index and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund and Extended Market 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 Extended Market Index are associated (or correlated) with Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Extended Market i.e., Extended Market and Mfs Value go up and down completely randomly.
Pair Corralation between Extended Market and Mfs Value
Assuming the 90 days horizon Extended Market Index is expected to generate 0.5 times more return on investment than Mfs Value. However, Extended Market Index is 2.0 times less risky than Mfs Value. It trades about 0.11 of its potential returns per unit of risk. Mfs Value Fund is currently generating about -0.26 per unit of risk. If you would invest 2,415 in Extended Market Index on September 15, 2024 and sell it today you would earn a total of 45.00 from holding Extended Market Index or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Extended Market Index vs. Mfs Value Fund
Performance |
| Timeline |
| Extended Market Index |
| Mfs Value Fund |
Extended Market and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extended Market and Mfs Value
The main advantage of trading using opposite Extended Market and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extended Market position performs unexpectedly, Mfs Value 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 Value will offset losses from the drop in Mfs Value's long position.| Extended Market vs. Income Fund Income | Extended Market vs. Usaa Nasdaq 100 | Extended Market vs. Victory Diversified Stock | Extended Market vs. Intermediate Term Bond Fund |
| Mfs Value vs. Morningstar Defensive Bond | Mfs Value vs. Ambrus Core Bond | Mfs Value vs. Multisector Bond Sma | Mfs Value vs. Ishares Municipal Bond |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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