Correlation Between Electronics Fund and Mfs Technology
Can any of the company-specific risk be diversified away by investing in both Electronics Fund and Mfs Technology 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 Electronics Fund and Mfs Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Electronics Fund Class and Mfs Technology Fund, you can compare the effects of market volatilities on Electronics Fund and Mfs Technology 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 Electronics Fund with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Electronics Fund and Mfs Technology.
Diversification Opportunities for Electronics Fund and Mfs Technology
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Electronics and Mfs is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Electronics Fund Class and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Electronics Fund 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 Electronics Fund Class are associated (or correlated) with Mfs Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Technology has no effect on the direction of Electronics Fund i.e., Electronics Fund and Mfs Technology go up and down completely randomly.
Pair Corralation between Electronics Fund and Mfs Technology
Assuming the 90 days horizon Electronics Fund Class is expected to generate 1.51 times more return on investment than Mfs Technology. However, Electronics Fund is 1.51 times more volatile than Mfs Technology Fund. It trades about -0.03 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about -0.07 per unit of risk. If you would invest 31,332 in Electronics Fund Class on January 17, 2024 and sell it today you would lose (353.00) from holding Electronics Fund Class or give up 1.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Electronics Fund Class vs. Mfs Technology Fund
Performance |
| Timeline |
| Electronics Fund Class |
| Mfs Technology |
Electronics Fund and Mfs Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Electronics Fund and Mfs Technology
The main advantage of trading using opposite Electronics Fund and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Electronics Fund position performs unexpectedly, Mfs Technology 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 Technology will offset losses from the drop in Mfs Technology's long position.| Electronics Fund vs. Health Care Fund | Electronics Fund vs. Telecommunications Fund Investor | Electronics Fund vs. Financial Services Fund | Electronics Fund vs. Transportation Fund Investor |
| Mfs Technology vs. VHAI | Mfs Technology vs. Viscount Systems | Mfs Technology vs. VivoPower International PLC | Mfs Technology vs. Exela Technologies Preferred |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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