Correlation Between Mfs Blended and Mfs Core

Can any of the company-specific risk be diversified away by investing in both Mfs Blended and Mfs Core 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 Mfs Blended and Mfs Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mfs Blended Research and Mfs E Equity, you can compare the effects of market volatilities on Mfs Blended and Mfs Core 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 Mfs Blended with a short position of Mfs Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and Mfs Core.

Diversification Opportunities for Mfs Blended and Mfs Core

0.98

Correlation Coefficient

Mfs Blended  Mfs Core

Almost no diversification

The 3 months correlation between Mfs and Mfs is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and Mfs E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs E Equity and Mfs Blended 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 Mfs Blended Research are associated (or correlated) with Mfs Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs E Equity has no effect on the direction of Mfs Blended i.e., Mfs Blended and Mfs Core go up and down completely randomly.

Pair Corralation between Mfs Blended and Mfs Core

Assuming the 90 days horizon Mfs Blended is expected to generate 1.33 times less return on investment than Mfs Core. But when comparing it to its historical volatility, Mfs Blended Research is 1.04 times less risky than Mfs Core. It trades about 0.16 of its potential returns per unit of risk. Mfs E Equity is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  4,205  in Mfs E Equity on September 2, 2024 and sell it today you would earn a total of  399.00  from holding Mfs E Equity or generate 9.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mfs Blended Research  vs.  Mfs E Equity

Mfs Blended Research

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Blended Research are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mfs Blended may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Mfs E Equity

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs E Equity are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Mfs Core may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mfs Blended and Mfs Core

The main advantage of trading using opposite Mfs Blended and Mfs Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Blended position performs unexpectedly, Mfs Core 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 Core will offset losses from the drop in Mfs Core's long position.

The idea behind Mfs Blended Research and Mfs E Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.