Correlation Between Alphacentric Global and Mfs Technology

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

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

Diversification Opportunities for Alphacentric Global and Mfs Technology

0.79

Correlation Coefficient

Alphacentric Global  Mfs Technology

Poor diversification

The 3 months correlation between Alphacentric and Mfs is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Global Innovation and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Alphacentric Global 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 Alphacentric Global Innovations are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Alphacentric Global i.e., Alphacentric Global and Mfs Technology go up and down completely randomly.

Pair Corralation between Alphacentric Global and Mfs Technology

Assuming the 90 days horizon Alphacentric Global Innovations is expected to under-perform the Mfs Technology. In addition to that, Alphacentric Global is 1.29 times more volatile than Mfs Technology Fund. It trades about -0.14 of its total potential returns per unit of risk. Mfs Technology Fund is currently generating about -0.13 per unit of volatility. If you would invest  4,360  in Mfs Technology Fund on December 30, 2024 and sell it today you would lose (550.00) from holding Mfs Technology Fund or give up 12.61% of portfolio value over 90 days.

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

Alphacentric Global Innovation  vs.  Mfs Technology Fund

Alphacentric Global

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphacentric Global Innovations has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Mfs Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Technology Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Alphacentric Global and Mfs Technology

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

The idea behind Alphacentric Global Innovations and Mfs Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.