Correlation Between MFS Investment and Pimco Income
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Pimco Income 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 Pimco Income 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 Pimco Income Strategy, you can compare the effects of market volatilities on MFS Investment and Pimco Income 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 Pimco Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Pimco Income.
Diversification Opportunities for MFS Investment and Pimco Income
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and Pimco is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Pimco Income Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Income Strategy 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 Pimco Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Income Strategy has no effect on the direction of MFS Investment i.e., MFS Investment and Pimco Income go up and down completely randomly.
Pair Corralation between MFS Investment and Pimco Income
Considering the 90-day investment horizon MFS Investment is expected to generate 1.68 times less return on investment than Pimco Income. But when comparing it to its historical volatility, MFS Investment Grade is 1.08 times less risky than Pimco Income. It trades about 0.06 of its potential returns per unit of risk. Pimco Income Strategy is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 574.00 in Pimco Income Strategy on November 27, 2024 and sell it today you would earn a total of 178.00 from holding Pimco Income Strategy or generate 31.01% 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. Pimco Income Strategy
Performance |
| Timeline |
| MFS Investment Grade |
| Pimco Income Strategy |
MFS Investment and Pimco Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Pimco Income
The main advantage of trading using opposite MFS Investment and Pimco Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Pimco Income 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 Pimco Income will offset losses from the drop in Pimco Income's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Pimco Income vs. Pcm Fund | Pimco Income vs. Pimco Corporate Income | Pimco Income vs. Pimco Global Stocksplus | Pimco Income vs. Pimco High Income |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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