Correlation Between Mfs Commodity and Nasdaq-100(r)

Can any of the company-specific risk be diversified away by investing in both Mfs Commodity and Nasdaq-100(r) 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 Commodity and Nasdaq-100(r) into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mfs Modity Strategy and Nasdaq 100 2x Strategy, you can compare the effects of market volatilities on Mfs Commodity and Nasdaq-100(r) 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 Commodity with a short position of Nasdaq-100(r). Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Commodity and Nasdaq-100(r).

Diversification Opportunities for Mfs Commodity and Nasdaq-100(r)

0.82

Correlation Coefficient

Mfs Commodity  Nasdaq-100(r)

Very poor diversification

The 3 months correlation between MFS and Nasdaq-100(r) is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Modity Strategy and Nasdaq 100 2x Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasdaq 100 2x and Mfs Commodity 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 Modity Strategy are associated (or correlated) with Nasdaq-100(r). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasdaq 100 2x has no effect on the direction of Mfs Commodity i.e., Mfs Commodity and Nasdaq-100(r) go up and down completely randomly.

Pair Corralation between Mfs Commodity and Nasdaq-100(r)

Assuming the 90 days horizon Mfs Commodity is expected to generate 2.81 times less return on investment than Nasdaq-100(r). But when comparing it to its historical volatility, Mfs Modity Strategy is 2.5 times less risky than Nasdaq-100(r). It trades about 0.12 of its potential returns per unit of risk. Nasdaq 100 2x Strategy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  62,873  in Nasdaq 100 2x Strategy on July 29, 2025 and sell it today you would earn a total of  10,175  from holding Nasdaq 100 2x Strategy or generate 16.18% return on investment over 90 days.

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

Mfs Modity Strategy  vs.  Nasdaq 100 2x Strategy

Mfs Modity Strategy

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Modity Strategy are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Mfs Commodity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nasdaq 100 2x

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq 100 2x Strategy are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak essential indicators, Nasdaq-100(r) showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mfs Commodity and Nasdaq-100(r)

The main advantage of trading using opposite Mfs Commodity and Nasdaq-100(r) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Commodity position performs unexpectedly, Nasdaq-100(r) 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 Nasdaq-100(r) will offset losses from the drop in Nasdaq-100(r)'s long position.

The idea behind Mfs Modity Strategy and Nasdaq 100 2x Strategy 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.