Correlation Between MFS Investment and Direxion
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Direxion 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 Investment and Direxion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Investment Grade and Direxion, you can compare the effects of market volatilities on MFS Investment and Direxion 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 Investment with a short position of Direxion. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Direxion.
Diversification Opportunities for MFS Investment and Direxion
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFS and Direxion is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Direxion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion and MFS Investment 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 Investment Grade are associated (or correlated) with Direxion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion has no effect on the direction of MFS Investment i.e., MFS Investment and Direxion go up and down completely randomly.
Pair Corralation between MFS Investment and Direxion
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.95 times more return on investment than Direxion. However, MFS Investment Grade is 1.06 times less risky than Direxion. It trades about 0.06 of its potential returns per unit of risk. Direxion is currently generating about -0.01 per unit of risk. If you would invest 670.00 in MFS Investment Grade on August 26, 2024 and sell it today you would earn a total of 140.00 from holding MFS Investment Grade or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 19.32% |
| Values | Daily Returns |
MFS Investment Grade vs. Direxion
Performance |
| Timeline |
| MFS Investment Grade |
| Direxion |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
MFS Investment and Direxion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Direxion
The main advantage of trading using opposite MFS Investment and Direxion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Direxion 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 Direxion will offset losses from the drop in Direxion's long position.| MFS Investment vs. PowerUp Acquisition Corp | MFS Investment vs. Aurora Innovation | MFS Investment vs. HUMANA INC | MFS Investment vs. Aquagold International |
| Direxion vs. Blackrock Muniholdings Ny | Direxion vs. MFS Investment Grade | Direxion vs. Eaton Vance National | Direxion vs. Invesco 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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