Correlation Between MFS Investment and Noah Holdings
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Noah Holdings 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 Noah Holdings 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 Noah Holdings, you can compare the effects of market volatilities on MFS Investment and Noah Holdings 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 Noah Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Noah Holdings.
Diversification Opportunities for MFS Investment and Noah Holdings
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and Noah is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Noah Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Noah Holdings 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 Noah Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Noah Holdings has no effect on the direction of MFS Investment i.e., MFS Investment and Noah Holdings go up and down completely randomly.
Pair Corralation between MFS Investment and Noah Holdings
Considering the 90-day investment horizon MFS Investment is expected to generate 1.95 times less return on investment than Noah Holdings. But when comparing it to its historical volatility, MFS Investment Grade is 7.95 times less risky than Noah Holdings. It trades about 0.13 of its potential returns per unit of risk. Noah Holdings is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,018 in Noah Holdings on August 26, 2024 and sell it today you would earn a total of 131.00 from holding Noah Holdings or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Noah Holdings
Performance |
| Timeline |
| MFS Investment Grade |
| Noah Holdings |
MFS Investment and Noah Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Noah Holdings
The main advantage of trading using opposite MFS Investment and Noah Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Noah Holdings 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 Noah Holdings will offset losses from the drop in Noah Holdings' 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 |
| Noah Holdings vs. MFS Investment Grade | Noah Holdings vs. Invesco High Income | Noah Holdings vs. Eaton Vance National | Noah Holdings vs. Nuveen California Select |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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