Correlation Between Mfs International and Mfs Commodity
Can any of the company-specific risk be diversified away by investing in both Mfs International and Mfs Commodity 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 International and Mfs Commodity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International Large and Mfs Commodity Strategy, you can compare the effects of market volatilities on Mfs International and Mfs Commodity 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 International with a short position of Mfs Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Mfs Commodity.
Diversification Opportunities for Mfs International and Mfs Commodity
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Mfs is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International Large and Mfs Commodity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Commodity Strategy and Mfs International 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 International Large are associated (or correlated) with Mfs Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Commodity Strategy has no effect on the direction of Mfs International i.e., Mfs International and Mfs Commodity go up and down completely randomly.
Pair Corralation between Mfs International and Mfs Commodity
Assuming the 90 days horizon Mfs International Large is expected to generate 0.82 times more return on investment than Mfs Commodity. However, Mfs International Large is 1.22 times less risky than Mfs Commodity. It trades about 0.32 of its potential returns per unit of risk. Mfs Commodity Strategy is currently generating about 0.08 per unit of risk. If you would invest 1,448 in Mfs International Large on April 25, 2025 and sell it today you would earn a total of 182.00 from holding Mfs International Large or generate 12.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs International Large vs. Mfs Commodity Strategy
Performance |
Timeline |
Mfs International Large |
Mfs Commodity Strategy |
Mfs International and Mfs Commodity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs International and Mfs Commodity
The main advantage of trading using opposite Mfs International and Mfs Commodity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Mfs Commodity 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 Commodity will offset losses from the drop in Mfs Commodity's long position.Mfs International vs. Multisector Bond Sma | Mfs International vs. California Municipal Portfolio | Mfs International vs. Federated Ultrashort Bond | Mfs International vs. Flexible Bond Portfolio |
Mfs Commodity vs. Legg Mason Partners | Mfs Commodity vs. Hsbc Funds | Mfs Commodity vs. Aim Investment Securities | Mfs Commodity vs. Nationwide Mutual Funds |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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