Correlation Between MFS Investment and Portman Ridge
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Portman Ridge 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 Portman Ridge 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 Portman Ridge Finance, you can compare the effects of market volatilities on MFS Investment and Portman Ridge 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 Portman Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Portman Ridge.
Diversification Opportunities for MFS Investment and Portman Ridge
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and Portman is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Portman Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portman Ridge Finance 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 Portman Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portman Ridge Finance has no effect on the direction of MFS Investment i.e., MFS Investment and Portman Ridge go up and down completely randomly.
Pair Corralation between MFS Investment and Portman Ridge
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.72 times more return on investment than Portman Ridge. However, MFS Investment Grade is 1.39 times less risky than Portman Ridge. It trades about 0.18 of its potential returns per unit of risk. Portman Ridge Finance is currently generating about 0.08 per unit of risk. If you would invest 784.00 in MFS Investment Grade on October 23, 2024 and sell it today you would earn a total of 15.00 from holding MFS Investment Grade or generate 1.91% 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. Portman Ridge Finance
Performance |
| Timeline |
| MFS Investment Grade |
| Portman Ridge Finance |
MFS Investment and Portman Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Portman Ridge
The main advantage of trading using opposite MFS Investment and Portman Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Portman Ridge 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 Portman Ridge will offset losses from the drop in Portman Ridge's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| Portman Ridge vs. Logan Ridge Finance | Portman Ridge vs. MFS Investment Grade | Portman Ridge vs. Eaton Vance National | Portman Ridge vs. WhiteHorse Finance |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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