Correlation Between Eaton Vance and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Eaton Vance and MFS Investment 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 Eaton Vance and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eaton Vance Risk and MFS Investment Grade, you can compare the effects of market volatilities on Eaton Vance and MFS Investment 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 Eaton Vance with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eaton Vance and MFS Investment.
Diversification Opportunities for Eaton Vance and MFS Investment
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eaton and MFS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Risk and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade and Eaton Vance 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 Eaton Vance Risk are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Eaton Vance i.e., Eaton Vance and MFS Investment go up and down completely randomly.
Pair Corralation between Eaton Vance and MFS Investment
Considering the 90-day investment horizon Eaton Vance Risk is expected to generate 1.39 times more return on investment than MFS Investment. However, Eaton Vance is 1.39 times more volatile than MFS Investment Grade. It trades about 0.16 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.06 per unit of risk. If you would invest 872.00 in Eaton Vance Risk on August 28, 2024 and sell it today you would earn a total of 55.00 from holding Eaton Vance Risk or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eaton Vance Risk vs. MFS Investment Grade
Performance |
| Timeline |
| Eaton Vance Risk |
| MFS Investment Grade |
Eaton Vance and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eaton Vance and MFS Investment
The main advantage of trading using opposite Eaton Vance and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eaton Vance position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.| Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax | Eaton Vance vs. Eaton Vance Tax Managed | Eaton Vance vs. Eaton Vance Tax |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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