Correlation Between Citigroup and MFS High
Can any of the company-specific risk be diversified away by investing in both Citigroup and MFS High 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 Citigroup and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and MFS High Income, you can compare the effects of market volatilities on Citigroup and MFS High 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 Citigroup with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and MFS High.
Diversification Opportunities for Citigroup and MFS High
Very good diversification
The 3 months correlation between Citigroup and MFS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income and Citigroup 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 Citigroup are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of Citigroup i.e., Citigroup and MFS High go up and down completely randomly.
Pair Corralation between Citigroup and MFS High
Taking into account the 90-day investment horizon Citigroup is expected to generate 3.41 times more return on investment than MFS High. However, Citigroup is 3.41 times more volatile than MFS High Income. It trades about 0.21 of its potential returns per unit of risk. MFS High Income is currently generating about -0.07 per unit of risk. If you would invest 6,255 in Citigroup on August 24, 2024 and sell it today you would earn a total of 640.00 from holding Citigroup or generate 10.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citigroup vs. MFS High Income
Performance |
| Timeline |
| Citigroup |
| MFS High Income |
Citigroup and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and MFS High
The main advantage of trading using opposite Citigroup and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, MFS High 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 High will offset losses from the drop in MFS High's long position.| Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Royal Bank of | Citigroup vs. JPMorgan Chase Co |
| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Invesco High Income | MFS High vs. Blackrock Muniholdings Ny |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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