Correlation Between MFS Investment and Gabelli Global
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Gabelli Global 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 Gabelli Global 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 Gabelli Global Small, you can compare the effects of market volatilities on MFS Investment and Gabelli Global 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 Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Gabelli Global.
Diversification Opportunities for MFS Investment and Gabelli Global
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MFS and Gabelli is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Gabelli Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Small 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 Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Small has no effect on the direction of MFS Investment i.e., MFS Investment and Gabelli Global go up and down completely randomly.
Pair Corralation between MFS Investment and Gabelli Global
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.65 times more return on investment than Gabelli Global. However, MFS Investment Grade is 1.53 times less risky than Gabelli Global. It trades about 0.04 of its potential returns per unit of risk. Gabelli Global Small is currently generating about 0.02 per unit of risk. If you would invest 693.00 in MFS Investment Grade on November 2, 2024 and sell it today you would earn a total of 108.00 from holding MFS Investment Grade or generate 15.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
MFS Investment Grade vs. Gabelli Global Small
Performance |
| Timeline |
| MFS Investment Grade |
| Gabelli Global Small |
MFS Investment and Gabelli Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Gabelli Global
The main advantage of trading using opposite MFS Investment and Gabelli Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Gabelli Global 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 Gabelli Global will offset losses from the drop in Gabelli Global's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Gabelli Global vs. MFS Investment Grade | Gabelli Global vs. Eaton Vance National | Gabelli Global vs. Nuveen California Select | Gabelli Global vs. Federated Premier Municipal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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