Correlation Between Mfs Blended and New World
Can any of the company-specific risk be diversified away by investing in both Mfs Blended and New World 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 Blended and New World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Blended Research and New World Fund, you can compare the effects of market volatilities on Mfs Blended and New World 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 Blended with a short position of New World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and New World.
Diversification Opportunities for Mfs Blended and New World
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and New is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and New World Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New World Fund and Mfs Blended 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 Blended Research are associated (or correlated) with New World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New World Fund has no effect on the direction of Mfs Blended i.e., Mfs Blended and New World go up and down completely randomly.
Pair Corralation between Mfs Blended and New World
Assuming the 90 days horizon Mfs Blended is expected to generate 1.38 times less return on investment than New World. In addition to that, Mfs Blended is 1.04 times more volatile than New World Fund. It trades about 0.05 of its total potential returns per unit of risk. New World Fund is currently generating about 0.07 per unit of volatility. If you would invest 6,699 in New World Fund on January 24, 2024 and sell it today you would earn a total of 951.00 from holding New World Fund or generate 14.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Blended Research vs. New World Fund
Performance |
| Timeline |
| Mfs Blended Research |
| New World Fund |
Mfs Blended and New World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Blended and New World
The main advantage of trading using opposite Mfs Blended and New World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Blended position performs unexpectedly, New World 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 New World will offset losses from the drop in New World's long position.| Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor |
| New World vs. Income Fund Of | New World vs. American Mutual Fund | New World vs. American Mutual Fund | New World vs. American Funds Income |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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