Correlation Between Prudential Jennison and Mfs International

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Can any of the company-specific risk be diversified away by investing in both Prudential Jennison and Mfs International 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 Prudential Jennison and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prudential Jennison International and Mfs International Value, you can compare the effects of market volatilities on Prudential Jennison and Mfs International 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 Prudential Jennison with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prudential Jennison and Mfs International.

Diversification Opportunities for Prudential Jennison and Mfs International

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Prudential and Mfs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding PRUDENTIAL JENNISON INTERNATIO and MFS INTERNATIONAL VALUE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value and Prudential Jennison 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 Prudential Jennison International are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Prudential Jennison i.e., Prudential Jennison and Mfs International go up and down completely randomly.

Pair Corralation between Prudential Jennison and Mfs International

Assuming the 90 days horizon Prudential Jennison is expected to generate 1.01 times less return on investment than Mfs International. In addition to that, Prudential Jennison is 1.3 times more volatile than Mfs International Value. It trades about 0.02 of its total potential returns per unit of risk. Mfs International Value is currently generating about 0.03 per unit of volatility. If you would invest  3,197  in Mfs International Value on December 29, 2023 and sell it today you would earn a total of  396.00  from holding Mfs International Value or generate 12.39% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

PRUDENTIAL JENNISON INTERNATIO  vs.  MFS INTERNATIONAL VALUE

 Performance 
       Timeline  
Prudential Jennison 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Prudential Jennison International are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Prudential Jennison may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Mfs International Value 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Mfs International Value are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Mfs International may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Prudential Jennison and Mfs International Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Prudential Jennison and Mfs International

The main advantage of trading using opposite Prudential Jennison and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prudential Jennison position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.
The idea behind Prudential Jennison International and Mfs International 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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