Correlation Between Mfs Technology and Europac Gold

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

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

Diversification Opportunities for Mfs Technology and Europac Gold

0.89

Correlation Coefficient

Mfs Technology  Europac Gold

Very poor diversification

The 3 months correlation between Mfs and Europac is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Europac Gold Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Europac Gold and Mfs Technology 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 Technology Fund are associated (or correlated) with Europac Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Europac Gold has no effect on the direction of Mfs Technology i.e., Mfs Technology and Europac Gold go up and down completely randomly.

Pair Corralation between Mfs Technology and Europac Gold

Assuming the 90 days horizon Mfs Technology is expected to generate 3.78 times less return on investment than Europac Gold. But when comparing it to its historical volatility, Mfs Technology Fund is 1.88 times less risky than Europac Gold. It trades about 0.16 of its potential returns per unit of risk. Europac Gold Fund is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  1,389  in Europac Gold Fund on July 5, 2025 and sell it today you would earn a total of  509.00  from holding Europac Gold Fund or generate 36.65% return on investment over 90 days.

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

Mfs Technology Fund  vs.  Europac Gold Fund

Mfs Technology

Risk-Adjusted Performance

Good

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

Europac Gold

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Europac Gold Fund are ranked lower than 25 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Europac Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mfs Technology and Europac Gold

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

The idea behind Mfs Technology Fund and Europac Gold 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.