Correlation Between MFS High and Invesco Trust
Can any of the company-specific risk be diversified away by investing in both MFS High and Invesco Trust 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 Invesco Trust 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 Invesco Trust For, you can compare the effects of market volatilities on MFS High and Invesco Trust 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 Invesco Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Invesco Trust.
Diversification Opportunities for MFS High and Invesco Trust
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MFS and Invesco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income and Invesco Trust For in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Trust For 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 Invesco Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Trust For has no effect on the direction of MFS High i.e., MFS High and Invesco Trust go up and down completely randomly.
Pair Corralation between MFS High and Invesco Trust
Considering the 90-day investment horizon MFS High Income is expected to under-perform the Invesco Trust. In addition to that, MFS High is 1.11 times more volatile than Invesco Trust For. It trades about -0.06 of its total potential returns per unit of risk. Invesco Trust For is currently generating about 0.01 per unit of volatility. If you would invest 1,004 in Invesco Trust For on October 26, 2024 and sell it today you would earn a total of 2.00 from holding Invesco Trust For or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Income vs. Invesco Trust For
Performance |
| Timeline |
| MFS High Income |
| Invesco Trust For |
MFS High and Invesco Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Invesco Trust
The main advantage of trading using opposite MFS High and Invesco Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Invesco Trust 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 Invesco Trust will offset losses from the drop in Invesco Trust's long position.| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Blackrock Muniholdings Ny | MFS High vs. Nuveen California Select |
| Invesco Trust vs. Invesco Municipal Income | Invesco Trust vs. DWS Municipal Income | Invesco Trust vs. MFS Municipal Income | Invesco Trust vs. MFS High 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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