Correlation Between Mfs Growth and Mfs International

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

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

Diversification Opportunities for Mfs Growth and Mfs International

0.95

Correlation Coefficient

Mfs Growth  Mfs International

Almost no diversification

The 3 months correlation between Mfs and Mfs is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value and Mfs Growth 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 Growth Fund are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Mfs Growth i.e., Mfs Growth and Mfs International go up and down completely randomly.

Pair Corralation between Mfs Growth and Mfs International

Assuming the 90 days horizon Mfs Growth Fund is expected to generate 1.29 times more return on investment than Mfs International. However, Mfs Growth is 1.29 times more volatile than Mfs International Value. It trades about 0.34 of its potential returns per unit of risk. Mfs International Value is currently generating about 0.2 per unit of risk. If you would invest  18,618  in Mfs Growth Fund on April 30, 2025 and sell it today you would earn a total of  3,602  from holding Mfs Growth Fund or generate 19.35% return on investment over 90 days.

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

Mfs Growth Fund  vs.  Mfs International Value

Mfs Growth Fund

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Growth Fund are ranked lower than 26 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Mfs Growth showed solid returns over the last few months and may actually be approaching a breakup point.

Mfs International Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs International Value are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Mfs International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Mfs Growth and Mfs International

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

The idea behind Mfs Growth Fund and Mfs International 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.