Correlation Between Invesco High and MFS High
Can any of the company-specific risk be diversified away by investing in both Invesco High 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 Invesco High and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco High Income and MFS High Income, you can compare the effects of market volatilities on Invesco High 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 Invesco High with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco High and MFS High.
Diversification Opportunities for Invesco High and MFS High
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Invesco and MFS is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Invesco High Income 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 Invesco High 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 Invesco High Income 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 Invesco High i.e., Invesco High and MFS High go up and down completely randomly.
Pair Corralation between Invesco High and MFS High
Given the investment horizon of 90 days Invesco High is expected to generate 2.03 times less return on investment than MFS High. But when comparing it to its historical volatility, Invesco High Income is 1.59 times less risky than MFS High. It trades about 0.02 of its potential returns per unit of risk. MFS High Income is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 341.00 in MFS High Income on October 25, 2024 and sell it today you would earn a total of 27.00 from holding MFS High Income or generate 7.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 93.12% |
| Values | Daily Returns |
Invesco High Income vs. MFS High Income
Performance |
| Timeline |
| Invesco High Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| MFS High Income |
Invesco High and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco High and MFS High
The main advantage of trading using opposite Invesco High and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco High 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.| Invesco High vs. MFS Investment Grade | Invesco High vs. Eaton Vance National | Invesco High vs. Nuveen California Select | Invesco High vs. Federated Premier Municipal |
| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Blackrock Muniholdings Ny | MFS High vs. Nuveen California Select |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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