Correlation Between Mfs Technology and Mainstay Fiera

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

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

Diversification Opportunities for Mfs Technology and Mainstay Fiera

0.82

Correlation Coefficient

Mfs Technology  Mainstay Fiera

Very poor diversification

The 3 months correlation between Mfs and Mainstay is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Mainstay Fiera Smid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Fiera Smid and Mfs Technology 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 Technology Fund are associated (or correlated) with Mainstay Fiera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Fiera Smid has no effect on the direction of Mfs Technology i.e., Mfs Technology and Mainstay Fiera go up and down completely randomly.

Pair Corralation between Mfs Technology and Mainstay Fiera

Assuming the 90 days horizon Mfs Technology Fund is expected to generate 0.71 times more return on investment than Mainstay Fiera. However, Mfs Technology Fund is 1.42 times less risky than Mainstay Fiera. It trades about 0.41 of its potential returns per unit of risk. Mainstay Fiera Smid is currently generating about 0.01 per unit of risk. If you would invest  5,086  in Mfs Technology Fund on September 18, 2024 and sell it today you would earn a total of  394.00  from holding Mfs Technology Fund or generate 7.75% return on investment over 90 days.

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

Mfs Technology Fund  vs.  Mainstay Fiera Smid

Mfs Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Technology Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Mfs Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Mainstay Fiera Smid

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Fiera Smid are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Mainstay Fiera may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mfs Technology and Mainstay Fiera

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

The idea behind Mfs Technology Fund and Mainstay Fiera Smid 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.