Correlation Between Mfs Value and Oakmark Fund

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

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

Diversification Opportunities for Mfs Value and Oakmark Fund

0.97

Correlation Coefficient

Mfs Value  Oakmark Fund

Almost no diversification

The 3 months correlation between Mfs and Oakmark is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and Oakmark Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oakmark Fund Institu and Mfs 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 Mfs Value Fund are associated (or correlated) with Oakmark Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oakmark Fund Institu has no effect on the direction of Mfs Value i.e., Mfs Value and Oakmark Fund go up and down completely randomly.

Pair Corralation between Mfs Value and Oakmark Fund

Assuming the 90 days horizon Mfs Value is expected to generate 2.32 times less return on investment than Oakmark Fund. But when comparing it to its historical volatility, Mfs Value Fund is 1.36 times less risky than Oakmark Fund. It trades about 0.03 of its potential returns per unit of risk. Oakmark Fund Institutional is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  10,321  in Oakmark Fund Institutional on January 19, 2024 and sell it today you would earn a total of  3,488  from holding Oakmark Fund Institutional or generate 33.8% return on investment over 90 days.

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

Mfs Value Fund  vs.  Oakmark Fund Institutional

Mfs Value Fund

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Value Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Mfs Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oakmark Fund Institu

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oakmark Fund Institutional are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Oakmark Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs Value and Oakmark Fund

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

The idea behind Mfs Value Fund and Oakmark Fund Institutional 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 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.