Correlation Between CBH and MFS Government
Can any of the company-specific risk be diversified away by investing in both CBH and MFS Government 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 CBH and MFS Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CBH and MFS Government Markets, you can compare the effects of market volatilities on CBH and MFS Government 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 CBH with a short position of MFS Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of CBH and MFS Government.
Diversification Opportunities for CBH and MFS Government
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CBH and MFS is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CBH and MFS Government Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Government Markets and CBH 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 CBH are associated (or correlated) with MFS Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Government Markets has no effect on the direction of CBH i.e., CBH and MFS Government go up and down completely randomly.
Pair Corralation between CBH and MFS Government
If you would invest 919.00 in CBH on August 27, 2024 and sell it today you would earn a total of 0.00 from holding CBH or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
CBH vs. MFS Government Markets
Performance |
| Timeline |
| CBH |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MFS Government Markets |
CBH and MFS Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CBH and MFS Government
The main advantage of trading using opposite CBH and MFS Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CBH position performs unexpectedly, MFS Government 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 Government will offset losses from the drop in MFS Government's long position.| CBH vs. MFS Investment Grade | CBH vs. Invesco High Income | CBH vs. Eaton Vance National | CBH vs. Nuveen California Select |
| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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