Correlation Between Smead Value and Mfs Value
Can any of the company-specific risk be diversified away by investing in both Smead Value and Mfs Value 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 Smead Value and Mfs Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Smead Value Fund and Mfs Value Fund, you can compare the effects of market volatilities on Smead Value and Mfs Value 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 Smead Value with a short position of Mfs Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Smead Value and Mfs Value.
Diversification Opportunities for Smead Value and Mfs Value
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Smead and Mfs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Smead Value Fund and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund and Smead Value 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 Smead Value Fund are associated (or correlated) with Mfs Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Smead Value i.e., Smead Value and Mfs Value go up and down completely randomly.
Pair Corralation between Smead Value and Mfs Value
Assuming the 90 days horizon Smead Value Fund is expected to generate 1.62 times more return on investment than Mfs Value. However, Smead Value is 1.62 times more volatile than Mfs Value Fund. It trades about 0.09 of its potential returns per unit of risk. Mfs Value Fund is currently generating about 0.1 per unit of risk. If you would invest 7,616 in Smead Value Fund on January 20, 2024 and sell it today you would earn a total of 366.00 from holding Smead Value Fund or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Smead Value Fund vs. Mfs Value Fund
Performance |
| Timeline |
| Smead Value Fund |
| Mfs Value Fund |
Smead Value and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Smead Value and Mfs Value
The main advantage of trading using opposite Smead Value and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Smead Value position performs unexpectedly, Mfs Value 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 Value will offset losses from the drop in Mfs Value's long position.| Smead Value vs. Dodge Cox Stock | Smead Value vs. American Funds American | Smead Value vs. American Funds American | Smead Value vs. American Mutual Fund |
| Mfs Value vs. Mfs Growth Fund | Mfs Value vs. Prudential Total Return | Mfs Value vs. Mfs International Diversification | Mfs Value vs. Mfs Mid Cap |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |