Correlation Between MFS Investment and Security Federal
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Security Federal 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 Security Federal 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 Security Federal, you can compare the effects of market volatilities on MFS Investment and Security Federal 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 Security Federal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Security Federal.
Diversification Opportunities for MFS Investment and Security Federal
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between MFS and Security is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Security Federal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Federal 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 Security Federal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Federal has no effect on the direction of MFS Investment i.e., MFS Investment and Security Federal go up and down completely randomly.
Pair Corralation between MFS Investment and Security Federal
Considering the 90-day investment horizon MFS Investment is expected to generate 1.33 times less return on investment than Security Federal. But when comparing it to its historical volatility, MFS Investment Grade is 3.58 times less risky than Security Federal. It trades about 0.06 of its potential returns per unit of risk. Security Federal is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,600 in Security Federal on August 25, 2024 and sell it today you would earn a total of 200.00 from holding Security Federal or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 72.98% |
| Values | Daily Returns |
MFS Investment Grade vs. Security Federal
Performance |
| Timeline |
| MFS Investment Grade |
| Security Federal |
MFS Investment and Security Federal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Security Federal
The main advantage of trading using opposite MFS Investment and Security Federal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Security Federal 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 Security Federal will offset losses from the drop in Security Federal's 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 |
| Security Federal vs. MF Bancorp | Security Federal vs. Merchants Marine Bancorp | Security Federal vs. MNB Holdings Corp | Security Federal vs. United Bancorporation of |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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