Correlation Between Intermediate-term and Mfs Global

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

By analyzing existing cross correlation between Intermediate Term Bond Fund and Mfs Global Real, you can compare the effects of market volatilities on Intermediate-term and Mfs Global 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 Intermediate-term with a short position of Mfs Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and Mfs Global.

Diversification Opportunities for Intermediate-term and Mfs Global

0.2

Correlation Coefficient

Intermediate-term  Mfs Global

Modest diversification

The 3 months correlation between Intermediate-term and Mfs is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Bond Fund and Mfs Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Global Real and Intermediate-term 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 Intermediate Term Bond Fund are associated (or correlated) with Mfs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Global Real has no effect on the direction of Intermediate-term i.e., Intermediate-term and Mfs Global go up and down completely randomly.

Pair Corralation between Intermediate-term and Mfs Global

Assuming the 90 days horizon Intermediate-term is expected to generate 1.09 times less return on investment than Mfs Global. But when comparing it to its historical volatility, Intermediate Term Bond Fund is 2.49 times less risky than Mfs Global. It trades about 0.16 of its potential returns per unit of risk. Mfs Global Real is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,626  in Mfs Global Real on May 26, 2025 and sell it today you would earn a total of  49.00  from holding Mfs Global Real or generate 3.01% return on investment over 90 days.

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

Intermediate Term Bond Fund  vs.  Mfs Global Real

Intermediate Term Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Intermediate Term Bond Fund are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intermediate-term is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Global Real

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Global Real are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mfs Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intermediate-term and Mfs Global

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

The idea behind Intermediate Term Bond Fund and Mfs Global Real 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.