Correlation Between Mfs Inflation-adjust and Eic Value
Can any of the company-specific risk be diversified away by investing in both Mfs Inflation-adjust and Eic Value 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 Inflation-adjust and Eic Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Inflation Adjusted Bond and Eic Value Fund, you can compare the effects of market volatilities on Mfs Inflation-adjust and Eic Value 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 Inflation-adjust with a short position of Eic Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Inflation-adjust and Eic Value.
Diversification Opportunities for Mfs Inflation-adjust and Eic Value
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mfs and Eic is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Inflation Adjusted Bond and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Mfs Inflation-adjust 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 Inflation Adjusted Bond are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Mfs Inflation-adjust i.e., Mfs Inflation-adjust and Eic Value go up and down completely randomly.
Pair Corralation between Mfs Inflation-adjust and Eic Value
Assuming the 90 days horizon Mfs Inflation-adjust is expected to generate 6.08 times less return on investment than Eic Value. But when comparing it to its historical volatility, Mfs Inflation Adjusted Bond is 1.85 times less risky than Eic Value. It trades about 0.02 of its potential returns per unit of risk. Eic Value Fund is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,471 in Eic Value Fund on September 4, 2024 and sell it today you would earn a total of 437.00 from holding Eic Value Fund or generate 29.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mfs Inflation Adjusted Bond vs. Eic Value Fund
Performance |
| Timeline |
| Mfs Inflation Adjusted |
| Eic Value Fund |
Mfs Inflation-adjust and Eic Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Inflation-adjust and Eic Value
The main advantage of trading using opposite Mfs Inflation-adjust and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Inflation-adjust position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.The idea behind Mfs Inflation Adjusted Bond and Eic Value Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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