Correlation Between Mfs Intermediate and Western Asset
Can any of the company-specific risk be diversified away by investing in both Mfs Intermediate and Western Asset 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 Mfs Intermediate and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Intermediate High and Western Asset High, you can compare the effects of market volatilities on Mfs Intermediate and Western Asset 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 Mfs Intermediate with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Intermediate and Western Asset.
Diversification Opportunities for Mfs Intermediate and Western Asset
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and Western is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intermediate High and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High and Mfs Intermediate 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 Mfs Intermediate High are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Mfs Intermediate i.e., Mfs Intermediate and Western Asset go up and down completely randomly.
Pair Corralation between Mfs Intermediate and Western Asset
Considering the 90-day investment horizon Mfs Intermediate High is expected to under-perform the Western Asset. But the fund apears to be less risky and, when comparing its historical volatility, Mfs Intermediate High is 1.39 times less risky than Western Asset. The fund trades about -0.1 of its potential returns per unit of risk. The Western Asset High is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,190 in Western Asset High on August 24, 2024 and sell it today you would earn a total of 26.00 from holding Western Asset High or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Mfs Intermediate High vs. Western Asset High
Performance |
| Timeline |
| Mfs Intermediate High |
| Western Asset High |
Mfs Intermediate and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Intermediate and Western Asset
The main advantage of trading using opposite Mfs Intermediate and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Intermediate position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Mfs Intermediate vs. Credit Suisse High | Mfs Intermediate vs. Western Asset High | Mfs Intermediate vs. Western Asset Global | Mfs Intermediate vs. Allspring Income Opportunities |
| Western Asset vs. Western Asset Global | Western Asset vs. Western Asset High | Western Asset vs. Voya Global Advantage | Western Asset vs. Voya Global Equity |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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