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 Cox International 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

0.99

Correlation Coefficient

Dodge Cox  Mfs Series

No risk reduction

The 3 months correlation between Dodge and Mfs is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Dodge Cox International 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 Cox International 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 Cox International is expected to generate 1.06 times more return on investment than Mfs Series. However, Dodge Cox is 1.06 times more volatile than Mfs Series Trust. It trades about 0.27 of its potential returns per unit of risk. Mfs Series Trust is currently generating about 0.29 per unit of risk. If you would invest  4,969  in Dodge Cox International on December 20, 2024 and sell it today you would earn a total of  723.00  from holding Dodge Cox International or generate 14.55% return on investment over 90 days.

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

Dodge Cox International  vs.  Mfs Series Trust

Dodge Cox International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox International are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dodge Cox showed solid returns over the last few months and may actually be approaching a breakup point.

Mfs Series Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Series Trust are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Mfs Series showed solid returns over the last few months and may actually be approaching a breakup point.

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 Cox International 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.