Correlation Between Income Fund and Mfs Growth
Can any of the company-specific risk be diversified away by investing in both Income Fund and Mfs Growth 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 Income Fund and Mfs Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Income Fund Of and Mfs Growth Allocation, you can compare the effects of market volatilities on Income Fund and Mfs Growth 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 Income Fund with a short position of Mfs Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Income Fund and Mfs Growth.
Diversification Opportunities for Income Fund and Mfs Growth
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Income and Mfs is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Income Fund Of and Mfs Growth Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Growth Allocation and Income 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 Income Fund Of are associated (or correlated) with Mfs Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Growth Allocation has no effect on the direction of Income Fund i.e., Income Fund and Mfs Growth go up and down completely randomly.
Pair Corralation between Income Fund and Mfs Growth
Assuming the 90 days horizon Income Fund Of is expected to generate 0.97 times more return on investment than Mfs Growth. However, Income Fund Of is 1.03 times less risky than Mfs Growth. It trades about -0.28 of its potential returns per unit of risk. Mfs Growth Allocation is currently generating about -0.39 per unit of risk. If you would invest 2,413 in Income Fund Of on January 21, 2024 and sell it today you would lose (70.00) from holding Income Fund Of or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Income Fund Of vs. Mfs Growth Allocation
Performance |
| Timeline |
| Income Fund |
| Mfs Growth Allocation |
Income Fund and Mfs Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Income Fund and Mfs Growth
The main advantage of trading using opposite Income Fund and Mfs Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Income Fund position performs unexpectedly, Mfs Growth 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 Growth will offset losses from the drop in Mfs Growth's long position.| Income Fund vs. New World Fund | Income Fund vs. American Mutual Fund | Income Fund vs. American Mutual Fund | Income Fund vs. American Funds Income |
| Mfs Growth vs. Mfs Prudent Investor | Mfs Growth vs. Mfs Prudent Investor | Mfs Growth vs. Mfs Prudent Investor | Mfs Growth vs. Mfs Prudent Investor |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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