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 Municipal 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
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Eaton and MFS is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Eaton Vance Municipal 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 Municipal 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 is expected to generate 1.94 times less return on investment than MFS Investment. In addition to that, Eaton Vance is 1.19 times more volatile than MFS Investment Grade. It trades about 0.06 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.14 per unit of volatility. If you would invest 689.00 in MFS Investment Grade on August 24, 2024 and sell it today you would earn a total of 123.00 from holding MFS Investment Grade or generate 17.85% 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 Municipal vs. MFS Investment Grade
Performance |
| Timeline |
| Eaton Vance Municipal |
| 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. MFS Investment Grade | Eaton Vance vs. Invesco High Income | Eaton Vance vs. Federated Premier Municipal | Eaton Vance vs. Nuveen California Select |
| MFS Investment vs. Invesco High Income | MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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