Correlation Between Gabelli Equity and MFS High
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity and MFS High 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 Gabelli Equity and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Equity and MFS High Income, you can compare the effects of market volatilities on Gabelli Equity and MFS High 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 Gabelli Equity with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and MFS High.
Diversification Opportunities for Gabelli Equity and MFS High
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gabelli and MFS is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income and Gabelli Equity 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 The Gabelli Equity are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and MFS High go up and down completely randomly.
Pair Corralation between Gabelli Equity and MFS High
Assuming the 90 days trading horizon The Gabelli Equity is expected to under-perform the MFS High. But the preferred stock apears to be less risky and, when comparing its historical volatility, The Gabelli Equity is 1.57 times less risky than MFS High. The preferred stock trades about -0.19 of its potential returns per unit of risk. The MFS High Income is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 382.00 in MFS High Income on September 1, 2024 and sell it today you would earn a total of 6.00 from holding MFS High Income or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. MFS High Income
Performance |
| Timeline |
| Gabelli Equity |
| MFS High Income |
Gabelli Equity and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and MFS High
The main advantage of trading using opposite Gabelli Equity and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity position performs unexpectedly, MFS High 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 High will offset losses from the drop in MFS High's long position.| Gabelli Equity vs. Virtus AllianzGI Convertible | Gabelli Equity vs. The Gabelli Equity | Gabelli Equity vs. Oxford Lane Capital | Gabelli Equity vs. The Gabelli Utility |
| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Invesco High Income | MFS High vs. Blackrock Muniholdings Ny |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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