Correlation Between Mfs Value and Eagle Mid

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

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

Diversification Opportunities for Mfs Value and Eagle Mid

-0.14

Correlation Coefficient

Mfs Value  Eagle Mid

Good diversification

The 3 months correlation between Mfs and Eagle is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Eagle Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Mid Cap and Mfs Value 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 Value Fund are associated (or correlated) with Eagle Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Mid Cap has no effect on the direction of Mfs Value i.e., Mfs Value and Eagle Mid go up and down completely randomly.

Pair Corralation between Mfs Value and Eagle Mid

Assuming the 90 days horizon Mfs Value Fund is expected to generate 0.34 times more return on investment than Eagle Mid. However, Mfs Value Fund is 2.93 times less risky than Eagle Mid. It trades about 0.04 of its potential returns per unit of risk. Eagle Mid Cap is currently generating about -0.15 per unit of risk. If you would invest  4,889  in Mfs Value Fund on December 24, 2024 and sell it today you would earn a total of  82.00  from holding Mfs Value Fund or generate 1.68% return on investment over 90 days.

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

Mfs Value Fund  vs.  Eagle Mid Cap

Mfs Value Fund

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Value Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Mfs Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Eagle Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eagle Mid Cap 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.

Pair Trading with Mfs Value and Eagle Mid

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

The idea behind Mfs Value Fund and Eagle Mid Cap 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.

Check out your portfolio center.

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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.