Correlation Between MFS Investment and Templeton Dragon
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Templeton Dragon 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 Templeton Dragon 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 Templeton Dragon Closed, you can compare the effects of market volatilities on MFS Investment and Templeton Dragon 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 Templeton Dragon. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Templeton Dragon.
Diversification Opportunities for MFS Investment and Templeton Dragon
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between MFS and Templeton is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Templeton Dragon Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Dragon Closed 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 Templeton Dragon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Dragon Closed has no effect on the direction of MFS Investment i.e., MFS Investment and Templeton Dragon go up and down completely randomly.
Pair Corralation between MFS Investment and Templeton Dragon
Considering the 90-day investment horizon MFS Investment is expected to generate 4.28 times less return on investment than Templeton Dragon. But when comparing it to its historical volatility, MFS Investment Grade is 5.8 times less risky than Templeton Dragon. It trades about 0.09 of its potential returns per unit of risk. Templeton Dragon Closed is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 774.00 in Templeton Dragon Closed on September 2, 2024 and sell it today you would earn a total of 78.00 from holding Templeton Dragon Closed or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. Templeton Dragon Closed
Performance |
| Timeline |
| MFS Investment Grade |
| Templeton Dragon Closed |
MFS Investment and Templeton Dragon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Templeton Dragon
The main advantage of trading using opposite MFS Investment and Templeton Dragon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Templeton Dragon 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 Templeton Dragon will offset losses from the drop in Templeton Dragon'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 |
| Templeton Dragon vs. Nuveen Municipalome | Templeton Dragon vs. Western Asset Investment | Templeton Dragon vs. Templeton Emerging Markets | Templeton Dragon vs. Tekla Life Sciences |
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 CEOs Directory module to screen CEOs from public companies around the world.
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