Correlation Between Deutsche Gold and Mfs Series

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

By analyzing existing cross correlation between Deutsche Gold Precious and Mfs Series Trust, you can compare the effects of market volatilities on Deutsche Gold and Mfs Series 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 Deutsche Gold with a short position of Mfs Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Gold and Mfs Series.

Diversification Opportunities for Deutsche Gold and Mfs Series

0.86

Correlation Coefficient

Deutsche Gold  Mfs Series

Very poor diversification

The 3 months correlation between Deutsche and Mfs is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Gold Precious and Mfs Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Series Trust and Deutsche Gold 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 Deutsche Gold Precious are associated (or correlated) with Mfs Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Series Trust has no effect on the direction of Deutsche Gold i.e., Deutsche Gold and Mfs Series go up and down completely randomly.

Pair Corralation between Deutsche Gold and Mfs Series

Assuming the 90 days horizon Deutsche Gold Precious is expected to generate 1.99 times more return on investment than Mfs Series. However, Deutsche Gold is 1.99 times more volatile than Mfs Series Trust. It trades about 0.24 of its potential returns per unit of risk. Mfs Series Trust is currently generating about 0.26 per unit of risk. If you would invest  5,237  in Deutsche Gold Precious on December 21, 2024 and sell it today you would earn a total of  1,305  from holding Deutsche Gold Precious or generate 24.92% return on investment over 90 days.

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

Deutsche Gold Precious  vs.  Mfs Series Trust

Deutsche Gold Precious

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Deutsche Gold Precious are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Deutsche Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Mfs Series Trust

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Series Trust are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Mfs Series showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Deutsche Gold and Mfs Series

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

The idea behind Deutsche Gold Precious and Mfs Series Trust 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.