Correlation Between North American and MFS Investment
Can any of the company-specific risk be diversified away by investing in both North American 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 North American and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Financial and MFS Investment Grade, you can compare the effects of market volatilities on North American 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 North American with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and MFS Investment.
Diversification Opportunities for North American and MFS Investment
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between North and MFS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding North American Financial 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 North American 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 North American Financial 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 North American i.e., North American and MFS Investment go up and down completely randomly.
Pair Corralation between North American and MFS Investment
Assuming the 90 days horizon North American Financial is expected to generate 15.53 times more return on investment than MFS Investment. However, North American is 15.53 times more volatile than MFS Investment Grade. It trades about 0.07 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.04 per unit of risk. If you would invest 306.00 in North American Financial on November 2, 2024 and sell it today you would earn a total of 211.00 from holding North American Financial or generate 68.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.97% |
| Values | Daily Returns |
North American Financial vs. MFS Investment Grade
Performance |
| Timeline |
| North American Financial |
| MFS Investment Grade |
North American and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and MFS Investment
The main advantage of trading using opposite North American and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American 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.| North American vs. Financial 15 Split | North American vs. Clough Global Ef | North American vs. Morgan Stanley India | North American vs. SEI Investments |
| 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |