Correlation Between MFS Active and Dow Jones
Can any of the company-specific risk be diversified away by investing in both MFS Active and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on MFS Active and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Active and Dow Jones.
Diversification Opportunities for MFS Active and Dow Jones
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFS and Dow is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding MFS Active Exchange and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of MFS Active i.e., MFS Active and Dow Jones go up and down completely randomly.
Pair Corralation between MFS Active and Dow Jones
Given the investment horizon of 90 days MFS Active Exchange is expected to generate 207.26 times more return on investment than Dow Jones. However, MFS Active is 207.26 times more volatile than Dow Jones Industrial. It trades about 0.18 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 0.00 in MFS Active Exchange on October 24, 2024 and sell it today you would earn a total of 2,467 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 | 51.67% |
| Values | Daily Returns |
MFS Active Exchange vs. Dow Jones Industrial
Performance |
| Timeline |
MFS Active and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
MFS Active Exchange
Pair trading matchups for MFS Active
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with MFS Active and Dow Jones
The main advantage of trading using opposite MFS Active and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Active position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| MFS Active vs. SSGA Active Trust | MFS Active vs. SPDR Nuveen Municipal | MFS Active vs. iShares Short Maturity | MFS Active vs. First Trust Flexible |
| Dow Jones vs. Transocean | Dow Jones vs. Noble plc | Dow Jones vs. Evolution Gaming Group | Dow Jones vs. Addus HomeCare |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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