Correlation Between MFS Investment and Strats SM
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Strats SM 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 Strats SM 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 Strats SM Trust, you can compare the effects of market volatilities on MFS Investment and Strats SM 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 Strats SM. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Strats SM.
Diversification Opportunities for MFS Investment and Strats SM
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and Strats is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Strats SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats SM Trust 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 Strats SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats SM Trust has no effect on the direction of MFS Investment i.e., MFS Investment and Strats SM go up and down completely randomly.
Pair Corralation between MFS Investment and Strats SM
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.41 times more return on investment than Strats SM. However, MFS Investment Grade is 2.45 times less risky than Strats SM. It trades about 0.13 of its potential returns per unit of risk. Strats SM Trust is currently generating about 0.03 per unit of risk. If you would invest 710.00 in MFS Investment Grade on September 3, 2024 and sell it today you would earn a total of 112.00 from holding MFS Investment Grade or generate 15.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 60.32% |
| Values | Daily Returns |
MFS Investment Grade vs. Strats SM Trust
Performance |
| Timeline |
| MFS Investment Grade |
| Strats SM Trust |
MFS Investment and Strats SM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Strats SM
The main advantage of trading using opposite MFS Investment and Strats SM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Strats SM 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 Strats SM will offset losses from the drop in Strats SM's long position.| MFS Investment vs. Invesco High Income | MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Strats SM vs. STRATS SM Trust | Strats SM vs. STRATSSM Certificates series | Strats SM vs. STRATS SM Trust | Strats SM vs. Strats SM Trust |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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