Correlation Between Scharf Global and Mfs Technology
Can any of the company-specific risk be diversified away by investing in both Scharf Global and Mfs Technology 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 Scharf Global and Mfs Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Mfs Technology Fund, you can compare the effects of market volatilities on Scharf Global and Mfs Technology 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 Scharf Global with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Mfs Technology.
Diversification Opportunities for Scharf Global and Mfs Technology
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scharf and Mfs is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Scharf Global 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 Scharf Global Opportunity are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Scharf Global i.e., Scharf Global and Mfs Technology go up and down completely randomly.
Pair Corralation between Scharf Global and Mfs Technology
Assuming the 90 days horizon Scharf Global is expected to generate 3.91 times less return on investment than Mfs Technology. But when comparing it to its historical volatility, Scharf Global Opportunity is 2.17 times less risky than Mfs Technology. It trades about 0.04 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 4,708 in Mfs Technology Fund on October 22, 2024 and sell it today you would earn a total of 2,675 from holding Mfs Technology Fund or generate 56.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Mfs Technology Fund
Performance |
| Timeline |
| Scharf Global Opportunity |
| Mfs Technology |
Scharf Global and Mfs Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Mfs Technology
The main advantage of trading using opposite Scharf Global and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global position performs unexpectedly, Mfs Technology 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 Technology will offset losses from the drop in Mfs Technology's long position.| Scharf Global vs. Elfun Government Money | Scharf Global vs. Short Term Government Fund | Scharf Global vs. Vanguard Short Term Government | Scharf Global vs. Dunham Porategovernment Bond |
| Mfs Technology vs. Technology Ultrasector Profund | Mfs Technology vs. Science Technology Fund | Mfs Technology vs. Fidelity Advisor Technology | Mfs Technology vs. Technology Ultrasector Profund |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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