Correlation Between Vanguard Explorer and Mfs New
Can any of the company-specific risk be diversified away by investing in both Vanguard Explorer and Mfs New 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 Vanguard Explorer and Mfs New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Explorer Fund and Mfs New Discovery, you can compare the effects of market volatilities on Vanguard Explorer and Mfs New 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 Vanguard Explorer with a short position of Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Explorer and Mfs New.
Diversification Opportunities for Vanguard Explorer and Mfs New
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Mfs is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Explorer Fund and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery and Vanguard Explorer 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 Vanguard Explorer Fund are associated (or correlated) with Mfs New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Vanguard Explorer i.e., Vanguard Explorer and Mfs New go up and down completely randomly.
Pair Corralation between Vanguard Explorer and Mfs New
Assuming the 90 days horizon Vanguard Explorer Fund is expected to generate 0.96 times more return on investment than Mfs New. However, Vanguard Explorer Fund is 1.05 times less risky than Mfs New. It trades about 0.06 of its potential returns per unit of risk. Mfs New Discovery is currently generating about 0.04 per unit of risk. If you would invest 10,655 in Vanguard Explorer Fund on September 12, 2024 and sell it today you would earn a total of 2,251 from holding Vanguard Explorer Fund or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Vanguard Explorer Fund vs. Mfs New Discovery
Performance |
| Timeline |
| Vanguard Explorer |
| Mfs New Discovery |
Vanguard Explorer and Mfs New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Explorer and Mfs New
The main advantage of trading using opposite Vanguard Explorer and Mfs New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Explorer position performs unexpectedly, Mfs New 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 New will offset losses from the drop in Mfs New's long position.| Vanguard Explorer vs. Third Avenue Real | Vanguard Explorer vs. Aegis Value Fund | Vanguard Explorer vs. Litman Gregory Masters | Vanguard Explorer vs. Marsico Growth Fund |
| Mfs New vs. Federated Hermes Inflation | Mfs New vs. Guggenheim Managed Futures | Mfs New vs. Simt Multi Asset Inflation | Mfs New vs. American Funds Inflation |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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