Correlation Between Mfs Technology and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Mfs Technology and Sterling Capital 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 Sterling Capital 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 Sterling Capital Intermediate, you can compare the effects of market volatilities on Mfs Technology and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Sterling Capital.
Diversification Opportunities for Mfs Technology and Sterling Capital
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mfs and Sterling is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Sterling Capital Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Int 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Int has no effect on the direction of Mfs Technology i.e., Mfs Technology and Sterling Capital go up and down completely randomly.
Pair Corralation between Mfs Technology and Sterling Capital
Assuming the 90 days horizon Mfs Technology Fund is expected to under-perform the Sterling Capital. In addition to that, Mfs Technology is 5.42 times more volatile than Sterling Capital Intermediate. It trades about -0.14 of its total potential returns per unit of risk. Sterling Capital Intermediate is currently generating about 0.22 per unit of volatility. If you would invest 856.00 in Sterling Capital Intermediate on December 5, 2024 and sell it today you would earn a total of 19.00 from holding Sterling Capital Intermediate or generate 2.22% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 97.5% |
Values | Daily Returns |
Mfs Technology Fund vs. Sterling Capital Intermediate
Performance |
Timeline |
Mfs Technology |
Sterling Capital Int |
Mfs Technology and Sterling Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs Technology and Sterling Capital
The main advantage of trading using opposite Mfs Technology and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital's long position.Mfs Technology vs. Firsthand Technology Opportunities | Mfs Technology vs. Invesco Technology Fund | Mfs Technology vs. Global Technology Portfolio | Mfs Technology vs. Technology Ultrasector Profund |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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