Correlation Between MFS High and Liberty All
Can any of the company-specific risk be diversified away by investing in both MFS High and Liberty All 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 Liberty All 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 Liberty All Star, you can compare the effects of market volatilities on MFS High and Liberty All 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 Liberty All. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Liberty All.
Diversification Opportunities for MFS High and Liberty All
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFS and Liberty is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income and Liberty All Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty All Star 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 Liberty All. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty All Star has no effect on the direction of MFS High i.e., MFS High and Liberty All go up and down completely randomly.
Pair Corralation between MFS High and Liberty All
Considering the 90-day investment horizon MFS High is expected to generate 1.61 times less return on investment than Liberty All. But when comparing it to its historical volatility, MFS High Income is 1.3 times less risky than Liberty All. It trades about 0.19 of its potential returns per unit of risk. Liberty All Star is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 697.00 in Liberty All Star on August 31, 2024 and sell it today you would earn a total of 33.00 from holding Liberty All Star or generate 4.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Income vs. Liberty All Star
Performance |
| Timeline |
| MFS High Income |
| Liberty All Star |
MFS High and Liberty All Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Liberty All
The main advantage of trading using opposite MFS High and Liberty All positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Liberty All 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 Liberty All will offset losses from the drop in Liberty All'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 |
| Liberty All vs. Adams Diversified Equity | Liberty All vs. BlackRock Science and | Liberty All vs. Virtus Allianzgi Artificial | Liberty All vs. Royce Value Closed |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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