Correlation Between Sterling Capital and Mfs New

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

By analyzing existing cross correlation between Sterling Capital Equity and Mfs New Discovery, you can compare the effects of market volatilities on Sterling Capital and Mfs New 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 Sterling Capital with a short position of Mfs New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Mfs New.

Diversification Opportunities for Sterling Capital and Mfs New

0.17

Correlation Coefficient

Sterling Capital  Mfs New

Average diversification

The 3 months correlation between Sterling and Mfs is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Equity and Mfs New Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs New Discovery and Sterling Capital 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 Sterling Capital Equity are associated (or correlated) with Mfs New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs New Discovery has no effect on the direction of Sterling Capital i.e., Sterling Capital and Mfs New go up and down completely randomly.

Pair Corralation between Sterling Capital and Mfs New

Assuming the 90 days horizon Sterling Capital Equity is expected to under-perform the Mfs New. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sterling Capital Equity is 1.75 times less risky than Mfs New. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Mfs New Discovery is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  2,596  in Mfs New Discovery on August 3, 2025 and sell it today you would earn a total of  152.00  from holding Mfs New Discovery or generate 5.86% return on investment over 90 days.

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

Sterling Capital Equity  vs.  Mfs New Discovery

Sterling Capital Equity

Risk-Adjusted Performance

Weakest

Over the last 90 days Sterling Capital Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Sterling Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs New Discovery

Risk-Adjusted Performance

Fair

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

Pair Trading with Sterling Capital and Mfs New

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

The idea behind Sterling Capital Equity and Mfs New Discovery 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.