Correlation Between Dodge Cox and Mfs Series

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

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

Diversification Opportunities for Dodge Cox and Mfs Series

0.97

Correlation Coefficient

Dodge Cox  Mfs Series

Almost no diversification

The 3 months correlation between Dodge and Mfs is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Dodge International Stock and Mfs Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Series Trust and Dodge Cox 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 Dodge International Stock are associated (or correlated) with Mfs Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Series Trust has no effect on the direction of Dodge Cox i.e., Dodge Cox and Mfs Series go up and down completely randomly.

Pair Corralation between Dodge Cox and Mfs Series

Assuming the 90 days horizon Dodge International Stock is expected to generate 0.69 times more return on investment than Mfs Series. However, Dodge International Stock is 1.45 times less risky than Mfs Series. It trades about -0.03 of its potential returns per unit of risk. Mfs Series Trust is currently generating about -0.08 per unit of risk. If you would invest  5,136  in Dodge International Stock on October 22, 2024 and sell it today you would lose (54.00) from holding Dodge International Stock or give up 1.05% of portfolio value over 90 days.

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

Dodge International Stock  vs.  Mfs Series Trust

Dodge International Stock

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mfs Series Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Series Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Dodge Cox and Mfs Series

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

The idea behind Dodge International Stock and Mfs Series Trust 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.