Correlation Between Oakmark Fund and Mfs Value

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

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

Diversification Opportunities for Oakmark Fund and Mfs Value

0.98

Correlation Coefficient

Oakmark Fund  Mfs Value

Almost no diversification

The 3 months correlation between Oakmark and Mfs is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark Fund Institutional 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 Oakmark Fund 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 Oakmark Fund Institutional 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 Oakmark Fund i.e., Oakmark Fund and Mfs Value go up and down completely randomly.

Pair Corralation between Oakmark Fund and Mfs Value

Assuming the 90 days horizon Oakmark Fund Institutional is expected to generate 1.15 times more return on investment than Mfs Value. However, Oakmark Fund is 1.15 times more volatile than Mfs Value Fund. It trades about -0.2 of its potential returns per unit of risk. Mfs Value Fund is currently generating about -0.28 per unit of risk. If you would invest  14,324  in Oakmark Fund Institutional on January 20, 2024 and sell it today you would lose (449.00) from holding Oakmark Fund Institutional or give up 3.13% of portfolio value over 90 days.

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

Oakmark Fund Institutional  vs.  Mfs Value Fund

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.

Mfs Value Fund

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Value Fund are ranked lower than 6 (%) 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.

Pair Trading with Oakmark Fund and Mfs Value

The main advantage of trading using opposite Oakmark Fund and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark Fund 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.

The idea behind Oakmark Fund Institutional and Mfs Value Fund 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.