Correlation Between Tekla Healthcare and Mfs Research
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Mfs Research 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 Tekla Healthcare and Mfs Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekla Healthcare Investors and Mfs Research Fund, you can compare the effects of market volatilities on Tekla Healthcare and Mfs Research 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 Tekla Healthcare with a short position of Mfs Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Mfs Research.
Diversification Opportunities for Tekla Healthcare and Mfs Research
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tekla and Mfs is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Mfs Research Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research and Tekla Healthcare 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 Tekla Healthcare Investors are associated (or correlated) with Mfs Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Mfs Research go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Mfs Research
Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Mfs Research. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Investors is 1.37 times less risky than Mfs Research. The mutual fund trades about -0.21 of its potential returns per unit of risk. The Mfs Research Fund is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 6,435 in Mfs Research Fund on October 9, 2024 and sell it today you would lose (589.00) from holding Mfs Research Fund or give up 9.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Mfs Research Fund
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Mfs Research |
Tekla Healthcare and Mfs Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Mfs Research
The main advantage of trading using opposite Tekla Healthcare and Mfs Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Mfs Research 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 Research will offset losses from the drop in Mfs Research's long position.| Tekla Healthcare vs. Nuveen Real Estate | Tekla Healthcare vs. Pender Real Estate | Tekla Healthcare vs. Columbia Real Estate | Tekla Healthcare vs. Dunham Real Estate |
| Mfs Research vs. Mfs Growth Fund | Mfs Research vs. Mfs Mid Cap | Mfs Research vs. Mfs Porate Bond | Mfs Research vs. Mfs Total Return |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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