Correlation Between MFS Investment and IShares Trust
Can any of the company-specific risk be diversified away by investing in both MFS Investment and IShares Trust 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 IShares Trust 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 iShares Trust, you can compare the effects of market volatilities on MFS Investment and IShares Trust 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 IShares Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and IShares Trust.
Diversification Opportunities for MFS Investment and IShares Trust
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between MFS and IShares is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and iShares Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares 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 IShares Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Trust has no effect on the direction of MFS Investment i.e., MFS Investment and IShares Trust go up and down completely randomly.
Pair Corralation between MFS Investment and IShares Trust
Considering the 90-day investment horizon MFS Investment is expected to generate 698.98 times less return on investment than IShares Trust. But when comparing it to its historical volatility, MFS Investment Grade is 561.05 times less risky than IShares Trust. It trades about 0.21 of its potential returns per unit of risk. iShares Trust is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 0.00 in iShares Trust on August 29, 2024 and sell it today you would earn a total of 2,505 from holding iShares Trust or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 11.9% |
| Values | Daily Returns |
MFS Investment Grade vs. iShares Trust
Performance |
| Timeline |
| MFS Investment Grade |
| iShares Trust |
MFS Investment and IShares Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and IShares Trust
The main advantage of trading using opposite MFS Investment and IShares Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, IShares Trust 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 IShares Trust will offset losses from the drop in IShares Trust'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 |
| IShares Trust vs. VanEck Vectors Moodys | IShares Trust vs. BondBloxx ETF Trust | IShares Trust vs. Vanguard ESG Corporate | IShares Trust vs. Vanguard Intermediate Term Corporate |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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