Correlation Between Barings Corporate and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Barings Corporate 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 Barings Corporate and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Corporate Investors and MFS Investment Grade, you can compare the effects of market volatilities on Barings Corporate 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 Barings Corporate with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Corporate and MFS Investment.
Diversification Opportunities for Barings Corporate and MFS Investment
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barings and MFS is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Barings Corporate Investors 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 Barings Corporate 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 Barings Corporate Investors 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 Barings Corporate i.e., Barings Corporate and MFS Investment go up and down completely randomly.
Pair Corralation between Barings Corporate and MFS Investment
Considering the 90-day investment horizon Barings Corporate Investors is expected to generate 2.33 times more return on investment than MFS Investment. However, Barings Corporate is 2.33 times more volatile than MFS Investment Grade. It trades about 0.1 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.19 per unit of risk. If you would invest 1,924 in Barings Corporate Investors on August 30, 2024 and sell it today you would earn a total of 57.00 from holding Barings Corporate Investors or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Corporate Investors vs. MFS Investment Grade
Performance |
| Timeline |
| Barings Corporate |
| MFS Investment Grade |
Barings Corporate and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Corporate and MFS Investment
The main advantage of trading using opposite Barings Corporate and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Corporate 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.| Barings Corporate vs. Eaton Vance National | Barings Corporate vs. John Hancock Investors | Barings Corporate vs. MFS Municipal Income | Barings Corporate vs. RiverNorth Flexible Municipalome |
| 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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