Correlation Between Mfs Global and Mfs E

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

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

Diversification Opportunities for Mfs Global and Mfs E

-0.72

Correlation Coefficient

Mfs Global  Mfs E

Pay attention - limited upside

The 3 months correlation between Mfs and Mfs is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Global Real and Mfs E Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs E Equity and Mfs 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 Mfs Global Real are associated (or correlated) with Mfs E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs E Equity has no effect on the direction of Mfs Global i.e., Mfs Global and Mfs E go up and down completely randomly.

Pair Corralation between Mfs Global and Mfs E

Assuming the 90 days horizon Mfs Global Real is expected to under-perform the Mfs E. In addition to that, Mfs Global is 1.14 times more volatile than Mfs E Equity. It trades about -0.21 of its total potential returns per unit of risk. Mfs E Equity is currently generating about 0.16 per unit of volatility. If you would invest  5,255  in Mfs E Equity on September 16, 2024 and sell it today you would earn a total of  384.00  from holding Mfs E Equity or generate 7.31% return on investment over 90 days.

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

Mfs Global Real  vs.  Mfs E Equity

Mfs Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mfs E Equity

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs E Equity are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mfs E may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mfs Global and Mfs E

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

The idea behind Mfs Global Real and Mfs E Equity 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.