Correlation Between MFS Investment and Adams Natural
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Adams Natural 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 Adams Natural 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 Adams Natural Resources, you can compare the effects of market volatilities on MFS Investment and Adams Natural 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 Adams Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Adams Natural.
Diversification Opportunities for MFS Investment and Adams Natural
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and Adams is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Adams Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Natural Resources 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 Adams Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Natural Resources has no effect on the direction of MFS Investment i.e., MFS Investment and Adams Natural go up and down completely randomly.
Pair Corralation between MFS Investment and Adams Natural
Considering the 90-day investment horizon MFS Investment Grade is expected to under-perform the Adams Natural. But the stock apears to be less risky and, when comparing its historical volatility, MFS Investment Grade is 2.4 times less risky than Adams Natural. The stock trades about -0.02 of its potential returns per unit of risk. The Adams Natural Resources is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,170 in Adams Natural Resources on November 4, 2024 and sell it today you would earn a total of 0.00 from holding Adams Natural Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Adams Natural Resources
Performance |
| Timeline |
| MFS Investment Grade |
| Adams Natural Resources |
MFS Investment and Adams Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Adams Natural
The main advantage of trading using opposite MFS Investment and Adams Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Adams Natural 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 Adams Natural will offset losses from the drop in Adams Natural's long position.| MFS Investment vs. Hudson Acquisition I | MFS Investment vs. Marblegate Acquisition Corp | MFS Investment vs. Alpha One | MFS Investment vs. Manaris Corp |
| Adams Natural vs. Tri Continental Closed | Adams Natural vs. Royce Value Closed | Adams Natural vs. Central Securities | Adams Natural vs. Eaton Vance Tax |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |