Correlation Between MFS Active and First Trust
Can any of the company-specific risk be diversified away by investing in both MFS Active and First Trust 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 Active and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Active Exchange and First Trust Exchange Traded, you can compare the effects of market volatilities on MFS Active and First Trust 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 Active with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Active and First Trust.
Diversification Opportunities for MFS Active and First Trust
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MFS and First is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Exchange and First Trust Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Exchange and MFS Active 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 Active Exchange are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Exchange has no effect on the direction of MFS Active i.e., MFS Active and First Trust go up and down completely randomly.
Pair Corralation between MFS Active and First Trust
Given the investment horizon of 90 days MFS Active Exchange is expected to generate 2505.04 times more return on investment than First Trust. However, MFS Active is 2505.04 times more volatile than First Trust Exchange Traded. It trades about 0.38 of its potential returns per unit of risk. First Trust Exchange Traded is currently generating about 0.21 per unit of risk. If you would invest 0.00 in MFS Active Exchange on September 14, 2024 and sell it today you would earn a total of 2,488 from holding MFS Active Exchange or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 3.48% |
| Values | Daily Returns |
MFS Active Exchange vs. First Trust Exchange Traded
Performance |
| Timeline |
| MFS Active Exchange |
| First Trust Exchange |
MFS Active and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Active and First Trust
The main advantage of trading using opposite MFS Active and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Active position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| MFS Active vs. Valued Advisers Trust | MFS Active vs. Columbia Diversified Fixed | MFS Active vs. Principal Exchange Traded Funds | MFS Active vs. Doubleline Etf Trust |
| First Trust vs. United States Steel | First Trust vs. Alcoa Corp | First Trust vs. First Majestic Silver | First Trust vs. AngloGold Ashanti plc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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