Correlation Between Highland Global and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Highland Global 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 Highland Global and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Global Allocation and MFS Investment Grade, you can compare the effects of market volatilities on Highland Global 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 Highland Global with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Global and MFS Investment.
Diversification Opportunities for Highland Global and MFS Investment
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highland and MFS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation 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 Highland Global 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 Highland Global Allocation 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 Highland Global i.e., Highland Global and MFS Investment go up and down completely randomly.
Pair Corralation between Highland Global and MFS Investment
Given the investment horizon of 90 days Highland Global is expected to generate 2.11 times less return on investment than MFS Investment. In addition to that, Highland Global is 1.81 times more volatile than MFS Investment Grade. It trades about 0.02 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 675.00 in MFS Investment Grade on August 30, 2024 and sell it today you would earn a total of 146.00 from holding MFS Investment Grade or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Global Allocation vs. MFS Investment Grade
Performance |
| Timeline |
| Highland Global Allo |
| MFS Investment Grade |
Highland Global and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Global and MFS Investment
The main advantage of trading using opposite Highland Global and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Global 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.| Highland Global vs. Capital Income Builder | Highland Global vs. Capital Income Builder | Highland Global vs. Capital Income Builder | Highland Global vs. HUMANA INC |
| MFS Investment vs. Invesco High Income | 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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