Correlation Between Mfs Intrinsic and Mfs Series

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

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

Diversification Opportunities for Mfs Intrinsic and Mfs Series

0.77

Correlation Coefficient

Mfs Intrinsic  Mfs Series

Poor diversification

The 3 months correlation between Mfs and Mfs is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intrinsic Value 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 Mfs Intrinsic 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 Intrinsic Value 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 Mfs Intrinsic i.e., Mfs Intrinsic and Mfs Series go up and down completely randomly.

Pair Corralation between Mfs Intrinsic and Mfs Series

Assuming the 90 days horizon Mfs Intrinsic Value is expected to generate 1.96 times more return on investment than Mfs Series. However, Mfs Intrinsic is 1.96 times more volatile than Mfs Series Trust. It trades about 0.06 of its potential returns per unit of risk. Mfs Series Trust is currently generating about 0.12 per unit of risk. If you would invest  1,236  in Mfs Intrinsic Value on September 15, 2024 and sell it today you would earn a total of  10.00  from holding Mfs Intrinsic Value or generate 0.81% return on investment over 90 days.

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

Mfs Intrinsic Value  vs.  Mfs Series Trust

Mfs Intrinsic Value

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Intrinsic Value are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mfs Intrinsic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Series Trust

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Mfs Intrinsic and Mfs Series

The main advantage of trading using opposite Mfs Intrinsic and Mfs Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Intrinsic 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 Mfs Intrinsic Value 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.