Correlation Between Us Large and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Us Large and Mfs Growth 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 Us Large and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Us Large Cap and Mfs Growth Fund, you can compare the effects of market volatilities on Us Large and Mfs Growth 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 Us Large with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Us Large and Mfs Growth.
Diversification Opportunities for Us Large and Mfs Growth
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between DFLVX and Mfs is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Us Large Cap and Mfs Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Fund and Us Large 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 Us Large Cap are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Fund has no effect on the direction of Us Large i.e., Us Large and Mfs Growth go up and down completely randomly.
Pair Corralation between Us Large and Mfs Growth
Assuming the 90 days horizon Us Large Cap is expected to under-perform the Mfs Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Us Large Cap is 1.73 times less risky than Mfs Growth. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Mfs Growth Fund is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 20,225 in Mfs Growth Fund on February 8, 2024 and sell it today you would lose (148.00) from holding Mfs Growth Fund or give up 0.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Us Large Cap vs. Mfs Growth Fund
Performance |
| Timeline |
| Us Large Cap |
| Mfs Growth Fund |
Us Large and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Us Large and Mfs Growth
The main advantage of trading using opposite Us Large and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Us Large position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| Us Large vs. Dodge Cox Stock | Us Large vs. American Funds American | Us Large vs. American Funds American | Us Large vs. American Mutual Fund |
| Mfs Growth vs. American Funds The | Mfs Growth vs. American Funds The | Mfs Growth vs. Growth Fund Of | Mfs Growth vs. Growth Fund Of |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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