Correlation Between First Keystone and MFS Investment
Can any of the company-specific risk be diversified away by investing in both First Keystone 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 First Keystone and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Keystone Corp and MFS Investment Grade, you can compare the effects of market volatilities on First Keystone 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 First Keystone with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Keystone and MFS Investment.
Diversification Opportunities for First Keystone and MFS Investment
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between First and MFS is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding First Keystone Corp 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 First Keystone 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 First Keystone Corp 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 First Keystone i.e., First Keystone and MFS Investment go up and down completely randomly.
Pair Corralation between First Keystone and MFS Investment
Given the investment horizon of 90 days First Keystone Corp is expected to generate 7.9 times more return on investment than MFS Investment. However, First Keystone is 7.9 times more volatile than MFS Investment Grade. It trades about 0.37 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.2 per unit of risk. If you would invest 1,175 in First Keystone Corp on September 1, 2024 and sell it today you would earn a total of 477.00 from holding First Keystone Corp or generate 40.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Keystone Corp vs. MFS Investment Grade
Performance |
| Timeline |
| First Keystone Corp |
| MFS Investment Grade |
First Keystone and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Keystone and MFS Investment
The main advantage of trading using opposite First Keystone and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Keystone 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.| First Keystone vs. HUMANA INC | First Keystone vs. SCOR PK | First Keystone vs. Aquagold International | First Keystone vs. Thrivent High Yield |
| MFS Investment vs. Visa Class A | MFS Investment vs. Diamond Hill Investment | MFS Investment vs. Distoken Acquisition | MFS Investment vs. Associated Capital Group |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |