Correlation Between MFS High and IHIT
Can any of the company-specific risk be diversified away by investing in both MFS High and IHIT 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 High and IHIT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Yield and IHIT, you can compare the effects of market volatilities on MFS High and IHIT 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 High with a short position of IHIT. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and IHIT.
Diversification Opportunities for MFS High and IHIT
Very good diversification
The 3 months correlation between MFS and IHIT is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Yield and IHIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IHIT and MFS High 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 High Yield are associated (or correlated) with IHIT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IHIT has no effect on the direction of MFS High i.e., MFS High and IHIT go up and down completely randomly.
Pair Corralation between MFS High and IHIT
If you would invest 354.00 in MFS High Yield on August 28, 2024 and sell it today you would earn a total of 5.00 from holding MFS High Yield or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
MFS High Yield vs. IHIT
Performance |
| Timeline |
| MFS High Yield |
| IHIT |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MFS High and IHIT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and IHIT
The main advantage of trading using opposite MFS High and IHIT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, IHIT 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 IHIT will offset losses from the drop in IHIT's long position.| MFS High vs. Aurora Innovation | MFS High vs. HUMANA INC | MFS High vs. Aquagold International | MFS High vs. Barloworld Ltd ADR |
| IHIT vs. MFS Investment Grade | IHIT vs. Invesco High Income | IHIT vs. Eaton Vance National | IHIT 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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