Correlation Between Equity Income and Mfs International
Can any of the company-specific risk be diversified away by investing in both Equity Income and Mfs International 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 Equity Income and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Income Fund and Mfs International New, you can compare the effects of market volatilities on Equity Income and Mfs International 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 Equity Income with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Income and Mfs International.
Diversification Opportunities for Equity Income and Mfs International
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Equity and Mfs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Equity Income Fund and Mfs International New in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International New and Equity Income 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 Equity Income Fund are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International New has no effect on the direction of Equity Income i.e., Equity Income and Mfs International go up and down completely randomly.
Pair Corralation between Equity Income and Mfs International
Assuming the 90 days horizon Equity Income Fund is expected to generate 0.84 times more return on investment than Mfs International. However, Equity Income Fund is 1.19 times less risky than Mfs International. It trades about 0.38 of its potential returns per unit of risk. Mfs International New is currently generating about 0.13 per unit of risk. If you would invest 835.00 in Equity Income Fund on November 2, 2024 and sell it today you would earn a total of 38.00 from holding Equity Income Fund or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Income Fund vs. Mfs International New
Performance |
| Timeline |
| Equity Income |
| Mfs International New |
Equity Income and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Income and Mfs International
The main advantage of trading using opposite Equity Income and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Income position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Equity Income vs. Millerhoward High Income | Equity Income vs. Siit High Yield | Equity Income vs. Virtus High Yield | Equity Income vs. Prudential High Yield |
| Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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