Correlation Between MFS Investment and Xtrackers USD
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Xtrackers USD 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 Xtrackers USD 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 Xtrackers USD High, you can compare the effects of market volatilities on MFS Investment and Xtrackers USD 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 Xtrackers USD. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Xtrackers USD.
Diversification Opportunities for MFS Investment and Xtrackers USD
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MFS and Xtrackers is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Xtrackers USD High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xtrackers USD High 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 Xtrackers USD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xtrackers USD High has no effect on the direction of MFS Investment i.e., MFS Investment and Xtrackers USD go up and down completely randomly.
Pair Corralation between MFS Investment and Xtrackers USD
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 2.42 times more return on investment than Xtrackers USD. However, MFS Investment is 2.42 times more volatile than Xtrackers USD High. It trades about 0.42 of its potential returns per unit of risk. Xtrackers USD High is currently generating about 0.23 per unit of risk. If you would invest 804.00 in MFS Investment Grade on September 14, 2024 and sell it today you would earn a total of 29.00 from holding MFS Investment Grade or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Xtrackers USD High
Performance |
| Timeline |
| MFS Investment Grade |
| Xtrackers USD High |
MFS Investment and Xtrackers USD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Xtrackers USD
The main advantage of trading using opposite MFS Investment and Xtrackers USD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Xtrackers USD 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 Xtrackers USD will offset losses from the drop in Xtrackers USD's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Xtrackers USD vs. SPDR Bloomberg Emerging | Xtrackers USD vs. iShares Broad USD | Xtrackers USD vs. SPDR Barclays Intermediate | Xtrackers USD vs. Schwab Intermediate Term Treasury |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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