Correlation Between Mfs Intrinsic and Mfs Mid

Can any of the company-specific risk be diversified away by investing in both Mfs Intrinsic and Mfs Mid 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 Mid 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 Mid Cap, you can compare the effects of market volatilities on Mfs Intrinsic and Mfs Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Intrinsic and Mfs Mid.

Diversification Opportunities for Mfs Intrinsic and Mfs Mid

0.89

Correlation Coefficient

Mfs Intrinsic  Mfs Mid

Very poor diversification

The 3 months correlation between Mfs and Mfs is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intrinsic Value and Mfs Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Mid Cap has no effect on the direction of Mfs Intrinsic i.e., Mfs Intrinsic and Mfs Mid go up and down completely randomly.

Pair Corralation between Mfs Intrinsic and Mfs Mid

Assuming the 90 days horizon Mfs Intrinsic Value is expected to generate 0.97 times more return on investment than Mfs Mid. However, Mfs Intrinsic Value is 1.03 times less risky than Mfs Mid. It trades about -0.02 of its potential returns per unit of risk. Mfs Mid Cap is currently generating about -0.03 per unit of risk. If you would invest  1,204  in Mfs Intrinsic Value on December 27, 2024 and sell it today you would lose (16.00) from holding Mfs Intrinsic Value or give up 1.33% of portfolio value over 90 days.

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

Mfs Intrinsic Value  vs.  Mfs Mid Cap

Mfs Intrinsic Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Intrinsic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Mfs Mid 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 Mid

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

The idea behind Mfs Intrinsic Value and Mfs Mid Cap 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.