Correlation Between MFS Investment and RiverNorth Managed
Can any of the company-specific risk be diversified away by investing in both MFS Investment and RiverNorth Managed 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 RiverNorth Managed 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 RiverNorth Managed Duration, you can compare the effects of market volatilities on MFS Investment and RiverNorth Managed 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 RiverNorth Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and RiverNorth Managed.
Diversification Opportunities for MFS Investment and RiverNorth Managed
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and RiverNorth is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and RiverNorth Managed Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RiverNorth Managed 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 RiverNorth Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RiverNorth Managed has no effect on the direction of MFS Investment i.e., MFS Investment and RiverNorth Managed go up and down completely randomly.
Pair Corralation between MFS Investment and RiverNorth Managed
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.74 times more return on investment than RiverNorth Managed. However, MFS Investment Grade is 1.35 times less risky than RiverNorth Managed. It trades about 0.08 of its potential returns per unit of risk. RiverNorth Managed Duration is currently generating about 0.05 per unit of risk. If you would invest 692.00 in MFS Investment Grade on August 31, 2024 and sell it today you would earn a total of 132.00 from holding MFS Investment Grade or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. RiverNorth Managed Duration
Performance |
| Timeline |
| MFS Investment Grade |
| RiverNorth Managed |
MFS Investment and RiverNorth Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and RiverNorth Managed
The main advantage of trading using opposite MFS Investment and RiverNorth Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, RiverNorth Managed 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 RiverNorth Managed will offset losses from the drop in RiverNorth Managed's long position.| MFS Investment vs. HUMANA INC | MFS Investment vs. SCOR PK | MFS Investment vs. Aquagold International | MFS Investment vs. Thrivent High Yield |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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