Correlation Between MFS Investment and Invesco Markets
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Invesco Markets 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 Invesco Markets 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 Invesco Markets plc, you can compare the effects of market volatilities on MFS Investment and Invesco Markets 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 Invesco Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Invesco Markets.
Diversification Opportunities for MFS Investment and Invesco Markets
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFS and Invesco is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Invesco Markets plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Markets plc 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 Invesco Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Markets plc has no effect on the direction of MFS Investment i.e., MFS Investment and Invesco Markets go up and down completely randomly.
Pair Corralation between MFS Investment and Invesco Markets
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 2.04 times more return on investment than Invesco Markets. However, MFS Investment is 2.04 times more volatile than Invesco Markets plc. It trades about 0.2 of its potential returns per unit of risk. Invesco Markets plc is currently generating about 0.07 per unit of risk. If you would invest 804.00 in MFS Investment Grade on September 1, 2024 and sell it today you would earn a total of 20.00 from holding MFS Investment Grade or generate 2.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
MFS Investment Grade vs. Invesco Markets plc
Performance |
| Timeline |
| MFS Investment Grade |
| Invesco Markets plc |
MFS Investment and Invesco Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Invesco Markets
The main advantage of trading using opposite MFS Investment and Invesco Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Invesco Markets 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 Invesco Markets will offset losses from the drop in Invesco Markets' 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 |
| Invesco Markets vs. Vanguard Total Stock | Invesco Markets vs. SPDR SP 500 | Invesco Markets vs. iShares Core SP | Invesco Markets vs. Vanguard Total Bond |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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