Correlation Between MFS Charter and NXG NextGen
Can any of the company-specific risk be diversified away by investing in both MFS Charter and NXG NextGen 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 MFS Charter and NXG NextGen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Charter Income and NXG NextGen Infrastructure, you can compare the effects of market volatilities on MFS Charter and NXG NextGen 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 MFS Charter with a short position of NXG NextGen. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Charter and NXG NextGen.
Diversification Opportunities for MFS Charter and NXG NextGen
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFS and NXG is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding MFS Charter Income and NXG NextGen Infrastructure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXG NextGen Infrastr and MFS Charter 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 MFS Charter Income are associated (or correlated) with NXG NextGen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXG NextGen Infrastr has no effect on the direction of MFS Charter i.e., MFS Charter and NXG NextGen go up and down completely randomly.
Pair Corralation between MFS Charter and NXG NextGen
Considering the 90-day investment horizon MFS Charter is expected to generate 5.86 times less return on investment than NXG NextGen. But when comparing it to its historical volatility, MFS Charter Income is 2.98 times less risky than NXG NextGen. It trades about 0.09 of its potential returns per unit of risk. NXG NextGen Infrastructure is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,770 in NXG NextGen Infrastructure on August 27, 2024 and sell it today you would earn a total of 2,177 from holding NXG NextGen Infrastructure or generate 78.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Charter Income vs. NXG NextGen Infrastructure
Performance |
| Timeline |
| MFS Charter Income |
| NXG NextGen Infrastr |
MFS Charter and NXG NextGen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Charter and NXG NextGen
The main advantage of trading using opposite MFS Charter and NXG NextGen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Charter position performs unexpectedly, NXG NextGen 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 NXG NextGen will offset losses from the drop in NXG NextGen's long position.| MFS Charter vs. MFS High Income | MFS Charter vs. MFS Investment Grade | MFS Charter vs. Eaton Vance National | MFS Charter vs. Invesco High Income |
| NXG NextGen vs. PowerUp Acquisition Corp | NXG NextGen vs. Aurora Innovation | NXG NextGen vs. HUMANA INC | NXG NextGen vs. Aquagold International |
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 CEOs Directory module to screen CEOs from public companies around the world.
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