Correlation Between New Germany and MFS Investment
Can any of the company-specific risk be diversified away by investing in both New Germany 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 New Germany and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Germany Closed and MFS Investment Grade, you can compare the effects of market volatilities on New Germany 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 New Germany with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Germany and MFS Investment.
Diversification Opportunities for New Germany and MFS Investment
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between New and MFS is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding New Germany Closed 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 New Germany 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 New Germany Closed 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 New Germany i.e., New Germany and MFS Investment go up and down completely randomly.
Pair Corralation between New Germany and MFS Investment
Allowing for the 90-day total investment horizon New Germany Closed is expected to under-perform the MFS Investment. In addition to that, New Germany is 1.39 times more volatile than MFS Investment Grade. It trades about -0.01 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.06 per unit of volatility. If you would invest 680.00 in MFS Investment Grade on August 31, 2024 and sell it today you would earn a total of 144.00 from holding MFS Investment Grade or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
New Germany Closed vs. MFS Investment Grade
Performance |
| Timeline |
| New Germany Closed |
| MFS Investment Grade |
New Germany and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Germany and MFS Investment
The main advantage of trading using opposite New Germany and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Germany 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.| New Germany vs. MFS Investment Grade | New Germany vs. Eaton Vance Municipal | New Germany vs. DTF Tax Free | New Germany vs. HUMANA INC |
| MFS Investment vs. HUMANA INC | MFS Investment vs. SCOR PK | MFS Investment vs. Aquagold International | MFS Investment vs. Thrivent High Yield |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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