Correlation Between American High-income and Mfs Intrinsic
Can any of the company-specific risk be diversified away by investing in both American High-income and Mfs Intrinsic 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 American High-income and Mfs Intrinsic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income Municipal and Mfs Intrinsic Value, you can compare the effects of market volatilities on American High-income and Mfs Intrinsic 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 American High-income with a short position of Mfs Intrinsic. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High-income and Mfs Intrinsic.
Diversification Opportunities for American High-income and Mfs Intrinsic
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Mfs is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding American High Income Municipal and Mfs Intrinsic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Intrinsic Value and American High-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 American High Income Municipal are associated (or correlated) with Mfs Intrinsic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Intrinsic Value has no effect on the direction of American High-income i.e., American High-income and Mfs Intrinsic go up and down completely randomly.
Pair Corralation between American High-income and Mfs Intrinsic
Assuming the 90 days horizon American High-income is expected to generate 36.85 times less return on investment than Mfs Intrinsic. But when comparing it to its historical volatility, American High Income Municipal is 2.78 times less risky than Mfs Intrinsic. It trades about 0.03 of its potential returns per unit of risk. Mfs Intrinsic Value is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 1,187 in Mfs Intrinsic Value on November 2, 2024 and sell it today you would earn a total of 64.00 from holding Mfs Intrinsic Value or generate 5.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
American High Income Municipal vs. Mfs Intrinsic Value
Performance |
| Timeline |
| American High Income |
| Mfs Intrinsic Value |
American High-income and Mfs Intrinsic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High-income and Mfs Intrinsic
The main advantage of trading using opposite American High-income and Mfs Intrinsic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High-income position performs unexpectedly, Mfs Intrinsic 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 Intrinsic will offset losses from the drop in Mfs Intrinsic's long position.| American High-income vs. Virtus Convertible | American High-income vs. Putnam Convertible Securities | American High-income vs. Fidelity Sai Convertible | American High-income vs. Allianzgi Convertible Income |
| Mfs Intrinsic vs. Mfs Prudent Investor | Mfs Intrinsic vs. Mfs Prudent Investor | Mfs Intrinsic vs. Mfs Prudent Investor | Mfs Intrinsic 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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