Correlation Between MFS Investment and First Northern
Can any of the company-specific risk be diversified away by investing in both MFS Investment and First Northern 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 First Northern 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 First Northern Community, you can compare the effects of market volatilities on MFS Investment and First Northern 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 First Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and First Northern.
Diversification Opportunities for MFS Investment and First Northern
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between MFS and First is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and First Northern Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northern Community 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 First Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northern Community has no effect on the direction of MFS Investment i.e., MFS Investment and First Northern go up and down completely randomly.
Pair Corralation between MFS Investment and First Northern
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.49 times more return on investment than First Northern. However, MFS Investment Grade is 2.05 times less risky than First Northern. It trades about 0.18 of its potential returns per unit of risk. First Northern Community is currently generating about 0.08 per unit of risk. If you would invest 655.00 in MFS Investment Grade on September 1, 2024 and sell it today you would earn a total of 169.00 from holding MFS Investment Grade or generate 25.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 85.87% |
| Values | Daily Returns |
MFS Investment Grade vs. First Northern Community
Performance |
| Timeline |
| MFS Investment Grade |
| First Northern Community |
MFS Investment and First Northern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and First Northern
The main advantage of trading using opposite MFS Investment and First Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, First Northern 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 First Northern will offset losses from the drop in First Northern'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 |
| First Northern vs. HUMANA INC | First Northern vs. SCOR PK | First Northern vs. Aquagold International | First Northern vs. Thrivent High Yield |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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