Correlation Between Bank of New York and MFS Intermediate
Can any of the company-specific risk be diversified away by investing in both Bank of New York and MFS Intermediate 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 Bank of New York and MFS Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of New and MFS Intermediate Income, you can compare the effects of market volatilities on Bank of New York and MFS Intermediate 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 Bank of New York with a short position of MFS Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of New York and MFS Intermediate.
Diversification Opportunities for Bank of New York and MFS Intermediate
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and MFS is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bank of New and MFS Intermediate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Intermediate Income and Bank of New York 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 Bank of New are associated (or correlated) with MFS Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Intermediate Income has no effect on the direction of Bank of New York i.e., Bank of New York and MFS Intermediate go up and down completely randomly.
Pair Corralation between Bank of New York and MFS Intermediate
Allowing for the 90-day total investment horizon Bank of New is expected to generate 1.74 times more return on investment than MFS Intermediate. However, Bank of New York is 1.74 times more volatile than MFS Intermediate Income. It trades about 0.11 of its potential returns per unit of risk. MFS Intermediate Income is currently generating about 0.03 per unit of risk. If you would invest 4,286 in Bank of New on September 3, 2024 and sell it today you would earn a total of 3,901 from holding Bank of New or generate 91.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of New vs. MFS Intermediate Income
Performance |
| Timeline |
| Bank of New York |
| MFS Intermediate Income |
Bank of New York and MFS Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of New York and MFS Intermediate
The main advantage of trading using opposite Bank of New York and MFS Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of New York position performs unexpectedly, MFS Intermediate 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 Intermediate will offset losses from the drop in MFS Intermediate's long position.| Bank of New York vs. Northern Trust | Bank of New York vs. Invesco Plc | Bank of New York vs. Franklin Resources | Bank of New York vs. T Rowe Price |
| MFS Intermediate vs. MFS Government Markets | MFS Intermediate vs. MFS Multimarket Income | MFS Intermediate vs. MFS Charter Income | MFS Intermediate vs. Putnam Premier Income |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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