Correlation Between Mfs Prudent and Rational Defensive

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

By analyzing existing cross correlation between Mfs Prudent Investor and Rational Defensive Growth, you can compare the effects of market volatilities on Mfs Prudent and Rational Defensive 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 Prudent with a short position of Rational Defensive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Prudent and Rational Defensive.

Diversification Opportunities for Mfs Prudent and Rational Defensive

0.0

Correlation Coefficient

Mfs Prudent  Rational Defensive

Pay attention - limited upside

The 3 months correlation between Mfs and Rational is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Prudent Investor and Rational Defensive Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rational Defensive Growth and Mfs Prudent 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 Prudent Investor are associated (or correlated) with Rational Defensive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rational Defensive Growth has no effect on the direction of Mfs Prudent i.e., Mfs Prudent and Rational Defensive go up and down completely randomly.

Pair Corralation between Mfs Prudent and Rational Defensive

If you would invest  3,832  in Rational Defensive Growth on May 3, 2025 and sell it today you would earn a total of  247.00  from holding Rational Defensive Growth or generate 6.45% return on investment over 90 days.

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

Mfs Prudent Investor  vs.  Rational Defensive Growth

Mfs Prudent Investor

Risk-Adjusted Performance

Very Weak

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

Rational Defensive Growth

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Rational Defensive Growth are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Rational Defensive may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Mfs Prudent and Rational Defensive

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

The idea behind Mfs Prudent Investor and Rational Defensive Growth 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.