Correlation Between Financial and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Financial 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 Financial and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and MFS Investment Grade, you can compare the effects of market volatilities on Financial 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 Financial with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and MFS Investment.
Diversification Opportunities for Financial and MFS Investment
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Financial and MFS is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split 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 Financial 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 Financial 15 Split 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 Financial i.e., Financial and MFS Investment go up and down completely randomly.
Pair Corralation between Financial and MFS Investment
Assuming the 90 days horizon Financial 15 Split is expected to generate 14.65 times more return on investment than MFS Investment. However, Financial is 14.65 times more volatile than MFS Investment Grade. It trades about 0.06 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 523.00 in Financial 15 Split on November 2, 2024 and sell it today you would earn a total of 142.00 from holding Financial 15 Split or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 66.94% |
| Values | Daily Returns |
Financial 15 Split vs. MFS Investment Grade
Performance |
| Timeline |
| Financial 15 Split |
| MFS Investment Grade |
Financial and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and MFS Investment
The main advantage of trading using opposite Financial and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial 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.| Financial vs. SEI Investments | Financial vs. Oxford Lane Capital | Financial vs. Blackstone Group | Financial vs. North American Financial |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |