Correlation Between Mfs International and Delaware Value

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

By analyzing existing cross correlation between Mfs International Value and Delaware Value Fund, you can compare the effects of market volatilities on Mfs International and Delaware Value 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 International with a short position of Delaware Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Delaware Value.

Diversification Opportunities for Mfs International and Delaware Value

-0.33

Correlation Coefficient

Mfs International  Delaware Value

Very good diversification

The 3 months correlation between Mfs and Delaware is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Value and Delaware Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delaware Value and Mfs International 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 International Value are associated (or correlated) with Delaware Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delaware Value has no effect on the direction of Mfs International i.e., Mfs International and Delaware Value go up and down completely randomly.

Pair Corralation between Mfs International and Delaware Value

Assuming the 90 days horizon Mfs International Value is expected to generate 1.11 times more return on investment than Delaware Value. However, Mfs International is 1.11 times more volatile than Delaware Value Fund. It trades about 0.06 of its potential returns per unit of risk. Delaware Value Fund is currently generating about 0.05 per unit of risk. If you would invest  3,300  in Mfs International Value on August 31, 2024 and sell it today you would earn a total of  765.00  from holding Mfs International Value or generate 23.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mfs International Value  vs.  Delaware Value Fund

Mfs International Value

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs International Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mfs International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Delaware Value

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Delaware Value Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Delaware Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs International and Delaware Value

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

The idea behind Mfs International Value and Delaware Value Fund 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.