Correlation Between Western Asset and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Western Asset and Mfs Growth 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 Western Asset and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Mfs Growth Allocation, you can compare the effects of market volatilities on Western Asset and Mfs Growth 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 Western Asset with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mfs Growth.
Diversification Opportunities for Western Asset and Mfs Growth
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Mfs is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Mfs Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Allocation and Western Asset 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 Western Asset Diversified are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Allocation has no effect on the direction of Western Asset i.e., Western Asset and Mfs Growth go up and down completely randomly.
Pair Corralation between Western Asset and Mfs Growth
Assuming the 90 days horizon Western Asset Diversified is expected to under-perform the Mfs Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Western Asset Diversified is 1.87 times less risky than Mfs Growth. The mutual fund trades about -0.19 of its potential returns per unit of risk. The Mfs Growth Allocation is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,456 in Mfs Growth Allocation on August 26, 2024 and sell it today you would earn a total of 22.00 from holding Mfs Growth Allocation or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Mfs Growth Allocation
Performance |
| Timeline |
| Western Asset Diversified |
| Mfs Growth Allocation |
Western Asset and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mfs Growth
The main advantage of trading using opposite Western Asset and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard 500 Index | Western Asset vs. Vanguard Total Stock | Western Asset vs. Vanguard Total Stock |
| Mfs Growth vs. Transamerica Emerging Markets | Mfs Growth vs. Ab All Market | Mfs Growth vs. Pace International Emerging | Mfs Growth vs. Western Asset Diversified |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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