Correlation Between Total Return and Mfs Research

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

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

Diversification Opportunities for Total Return and Mfs Research

0.0

Correlation Coefficient

Total Return  Mfs Research

Pay attention - limited upside

The 3 months correlation between Total and Mfs is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Total Return Fund and Mfs Research International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Research Interna and Total Return 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 Total Return Fund are associated (or correlated) with Mfs Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Research Interna has no effect on the direction of Total Return i.e., Total Return and Mfs Research go up and down completely randomly.

Pair Corralation between Total Return and Mfs Research

If you would invest (100.00) in Mfs Research International on February 8, 2024 and sell it today you would earn a total of  100.00  from holding Mfs Research International or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Total Return Fund  vs.  Mfs Research International

Total Return

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Total Return Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Total Return is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Research Interna

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Total Return and Mfs Research

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

The idea behind Total Return Fund and Mfs Research International 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.