Correlation Between MFS Government and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both MFS Government and Eaton Vance 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 Government and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Government Markets and Eaton Vance National, you can compare the effects of market volatilities on MFS Government and Eaton Vance 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 Government with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Government and Eaton Vance.
Diversification Opportunities for MFS Government and Eaton Vance
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Eaton is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding MFS Government Markets and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and MFS Government 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 Government Markets are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance National has no effect on the direction of MFS Government i.e., MFS Government and Eaton Vance go up and down completely randomly.
Pair Corralation between MFS Government and Eaton Vance
Considering the 90-day investment horizon MFS Government Markets is expected to under-perform the Eaton Vance. In addition to that, MFS Government is 1.27 times more volatile than Eaton Vance National. It trades about -0.18 of its total potential returns per unit of risk. Eaton Vance National is currently generating about -0.11 per unit of volatility. If you would invest 1,758 in Eaton Vance National on August 31, 2024 and sell it today you would lose (22.00) from holding Eaton Vance National or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Government Markets vs. Eaton Vance National
Performance |
| Timeline |
| MFS Government Markets |
| Eaton Vance National |
MFS Government and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Government and Eaton Vance
The main advantage of trading using opposite MFS Government and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Government position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
| Eaton Vance vs. Invesco High Income | Eaton Vance vs. Blackrock Muniholdings Ny | Eaton Vance vs. Nuveen California Select | Eaton Vance vs. MFS Investment Grade |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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