Correlation Between Hotchkis Wiley and Mfs Technology

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

By analyzing existing cross correlation between Hotchkis Wiley Mid Cap and Mfs Technology Fund, you can compare the effects of market volatilities on Hotchkis Wiley 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 Hotchkis Wiley with a short position of Mfs Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotchkis Wiley and Mfs Technology.

Diversification Opportunities for Hotchkis Wiley and Mfs Technology

0.7

Correlation Coefficient

Hotchkis Wiley  Mfs Technology

Poor diversification

The 3 months correlation between Hotchkis and Mfs is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hotchkis Wiley Mid Cap and Mfs Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Technology and Hotchkis Wiley 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 Hotchkis Wiley Mid Cap 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 Hotchkis Wiley i.e., Hotchkis Wiley and Mfs Technology go up and down completely randomly.

Pair Corralation between Hotchkis Wiley and Mfs Technology

Assuming the 90 days horizon Hotchkis Wiley is expected to generate 1.18 times less return on investment than Mfs Technology. In addition to that, Hotchkis Wiley is 1.19 times more volatile than Mfs Technology Fund. It trades about 0.15 of its total potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.22 per unit of volatility. If you would invest  3,969  in Mfs Technology Fund on May 4, 2025 and sell it today you would earn a total of  559.00  from holding Mfs Technology Fund or generate 14.08% return on investment over 90 days.

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

Hotchkis Wiley Mid Cap  vs.  Mfs Technology Fund

Hotchkis Wiley Mid

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hotchkis Wiley Mid Cap are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Hotchkis Wiley may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Mfs Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Technology Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Mfs Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hotchkis Wiley and Mfs Technology

The main advantage of trading using opposite Hotchkis Wiley and Mfs Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotchkis Wiley 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.

The idea behind Hotchkis Wiley Mid Cap and Mfs Technology Fund 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.