Correlation Between Mfs Growth and Teton Westwood

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

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

Diversification Opportunities for Mfs Growth and Teton Westwood

0.58

Correlation Coefficient

Mfs Growth  Teton Westwood

Very weak diversification

The 1 month correlation between Mfs and Teton is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Growth Fund and Teton Westwood Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Equity and Mfs Growth 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 Growth Fund are associated (or correlated) with Teton Westwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Westwood Equity has no effect on the direction of Mfs Growth i.e., Mfs Growth and Teton Westwood go up and down completely randomly.

Pair Corralation between Mfs Growth and Teton Westwood

Assuming the 90 days horizon Mfs Growth is expected to generate 2.62 times less return on investment than Teton Westwood. In addition to that, Mfs Growth is 1.93 times more volatile than Teton Westwood Equity. It trades about 0.02 of its total potential returns per unit of risk. Teton Westwood Equity is currently generating about 0.1 per unit of volatility. If you would invest  1,137  in Teton Westwood Equity on February 10, 2024 and sell it today you would earn a total of  17.00  from holding Teton Westwood Equity or generate 1.5% return on investment over 90 days.

Time Period	1 Month [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

Mfs Growth Fund  vs.  Teton Westwood Equity

Mfs Growth Fund

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Growth Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking signals, Mfs Growth is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Teton Westwood Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Teton Westwood Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Teton Westwood 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 Growth and Teton Westwood

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

The idea behind Mfs Growth Fund and Teton Westwood Equity 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.