Correlation Between Mfs New and Mfs Intrinsic

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

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

Diversification Opportunities for Mfs New and Mfs Intrinsic

0.95

Correlation Coefficient

Mfs New  Mfs Intrinsic

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 New Discovery and Mfs Intrinsic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Intrinsic Value and Mfs New 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 New Discovery are associated (or correlated) with Mfs Intrinsic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Intrinsic Value has no effect on the direction of Mfs New i.e., Mfs New and Mfs Intrinsic go up and down completely randomly.

Pair Corralation between Mfs New and Mfs Intrinsic

Assuming the 90 days horizon Mfs New is expected to generate 1.01 times less return on investment than Mfs Intrinsic. In addition to that, Mfs New is 1.48 times more volatile than Mfs Intrinsic Value. It trades about 0.17 of its total potential returns per unit of risk. Mfs Intrinsic Value is currently generating about 0.26 per unit of volatility. If you would invest  1,147  in Mfs Intrinsic Value on April 25, 2025 and sell it today you would earn a total of  137.00  from holding Mfs Intrinsic Value or generate 11.94% return on investment over 90 days.

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

Mfs New Discovery  vs.  Mfs Intrinsic Value

Mfs New Discovery

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs New Discovery are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Mfs New may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Mfs Intrinsic Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Intrinsic Value are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mfs Intrinsic may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Mfs New and Mfs Intrinsic

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

The idea behind Mfs New Discovery and Mfs Intrinsic 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 Global Correlations module to find global opportunities by holding instruments from different markets.