Correlation Between MFS Investment and Royce Global

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

By analyzing existing cross correlation between MFS Investment Grade and Royce Global Value, you can compare the effects of market volatilities on MFS Investment and Royce Global 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 Investment with a short position of Royce Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Royce Global.

Diversification Opportunities for MFS Investment and Royce Global

0.85

Correlation Coefficient

MFS Investment  Royce Global

Very poor diversification

The 3 months correlation between MFS and Royce is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Royce Global Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royce Global Value and MFS Investment 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 Investment Grade are associated (or correlated) with Royce Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royce Global Value has no effect on the direction of MFS Investment i.e., MFS Investment and Royce Global go up and down completely randomly.

Pair Corralation between MFS Investment and Royce Global

Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.45 times more return on investment than Royce Global. However, MFS Investment Grade is 2.23 times less risky than Royce Global. It trades about 0.37 of its potential returns per unit of risk. Royce Global Value is currently generating about 0.09 per unit of risk. If you would invest  728.00  in MFS Investment Grade on July 22, 2025 and sell it today you would earn a total of  68.00  from holding MFS Investment Grade or generate 9.34% return on investment over 90 days.

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

MFS Investment Grade  vs.  Royce Global Value

MFS Investment Grade

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Investment Grade are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, MFS Investment may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Royce Global Value

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Royce Global Value are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Royce Global is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with MFS Investment and Royce Global

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

The idea behind MFS Investment Grade and Royce Global Value 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.