Correlation Between MFS Investment and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Eaton Vance 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 Eaton Vance 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 Eaton Vance Mbf, you can compare the effects of market volatilities on MFS Investment and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Eaton Vance.
Diversification Opportunities for MFS Investment and Eaton Vance
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Eaton is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Eaton Vance Mbf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Mbf 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Mbf has no effect on the direction of MFS Investment i.e., MFS Investment and Eaton Vance go up and down completely randomly.
Pair Corralation between MFS Investment and Eaton Vance
Considering the 90-day investment horizon MFS Investment is expected to generate 1.16 times less return on investment than Eaton Vance. But when comparing it to its historical volatility, MFS Investment Grade is 1.09 times less risky than Eaton Vance. It trades about 0.2 of its potential returns per unit of risk. Eaton Vance Mbf is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,042 in Eaton Vance Mbf on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Eaton Vance Mbf or generate 2.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Eaton Vance Mbf
Performance |
| Timeline |
| MFS Investment Grade |
| Eaton Vance Mbf |
MFS Investment and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Eaton Vance
The main advantage of trading using opposite MFS Investment and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| MFS Investment vs. Visa Class A | MFS Investment vs. Diamond Hill Investment | MFS Investment vs. Distoken Acquisition | MFS Investment vs. Associated Capital Group |
| Eaton Vance vs. Eaton Vance Municipal | Eaton Vance vs. Eaton Vance California | Eaton Vance vs. Eaton Vance New | Eaton Vance vs. BlackRock Municipal 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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