Correlation Between MFS High and MFS Intermediate
Can any of the company-specific risk be diversified away by investing in both MFS High 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 MFS High and MFS Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Income and MFS Intermediate Income, you can compare the effects of market volatilities on MFS High 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 MFS High with a short position of MFS Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and MFS Intermediate.
Diversification Opportunities for MFS High and MFS Intermediate
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and MFS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income 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 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 Income 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 MFS High i.e., MFS High and MFS Intermediate go up and down completely randomly.
Pair Corralation between MFS High and MFS Intermediate
Considering the 90-day investment horizon MFS High Income is expected to generate 0.95 times more return on investment than MFS Intermediate. However, MFS High Income is 1.05 times less risky than MFS Intermediate. It trades about 0.1 of its potential returns per unit of risk. MFS Intermediate Income is currently generating about 0.04 per unit of risk. If you would invest 319.00 in MFS High Income on August 24, 2024 and sell it today you would earn a total of 60.90 from holding MFS High Income or generate 19.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
MFS High Income vs. MFS Intermediate Income
Performance |
| Timeline |
| MFS High Income |
| MFS Intermediate Income |
MFS High and MFS Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and MFS Intermediate
The main advantage of trading using opposite MFS High and MFS Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High 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.| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Invesco High Income | MFS High vs. Blackrock Muniholdings Ny |
| 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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