Correlation Between Fundamental Large and Mfs Technology

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

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

Diversification Opportunities for Fundamental Large and Mfs Technology

0.89

Correlation Coefficient

Fundamental Large  Mfs Technology

Very poor diversification

The 3 months correlation between Fundamental and Mfs is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Large 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 Fundamental 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 Fundamental Large 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 Fundamental Large i.e., Fundamental Large and Mfs Technology go up and down completely randomly.

Pair Corralation between Fundamental Large and Mfs Technology

Assuming the 90 days horizon Fundamental Large is expected to generate 2.01 times less return on investment than Mfs Technology. But when comparing it to its historical volatility, Fundamental Large Cap is 1.6 times less risky than Mfs Technology. It trades about 0.08 of its potential returns per unit of risk. Mfs Technology Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  4,712  in Mfs Technology Fund on September 6, 2025 and sell it today you would earn a total of  365.00  from holding Mfs Technology Fund or generate 7.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Fundamental Large Cap  vs.  Mfs Technology Fund

Fundamental Large Cap

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Fundamental Large Cap are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Fundamental Large is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Technology

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Technology Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Mfs Technology may actually be approaching a critical reversion point that can send shares even higher in January 2026.

Pair Trading with Fundamental Large and Mfs Technology

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

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.