Correlation Between MFS Intermediate and MFS High
Can any of the company-specific risk be diversified away by investing in both MFS Intermediate and MFS High 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 Intermediate and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Intermediate Income and MFS High Income, you can compare the effects of market volatilities on MFS Intermediate and MFS High 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 Intermediate with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Intermediate and MFS High.
Diversification Opportunities for MFS Intermediate and MFS High
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and MFS is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding MFS Intermediate Income and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income and MFS Intermediate 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 Intermediate Income are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of MFS Intermediate i.e., MFS Intermediate and MFS High go up and down completely randomly.
Pair Corralation between MFS Intermediate and MFS High
Considering the 90-day investment horizon MFS Intermediate Income is expected to generate 1.02 times more return on investment than MFS High. However, MFS Intermediate is 1.02 times more volatile than MFS High Income. It trades about -0.02 of its potential returns per unit of risk. MFS High Income is currently generating about -0.05 per unit of risk. If you would invest 269.00 in MFS Intermediate Income on August 24, 2024 and sell it today you would lose (1.00) from holding MFS Intermediate Income or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
MFS Intermediate Income vs. MFS High Income
Performance |
| Timeline |
| MFS Intermediate Income |
| MFS High Income |
MFS Intermediate and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Intermediate and MFS High
The main advantage of trading using opposite MFS Intermediate and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Intermediate position performs unexpectedly, MFS High 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 MFS High will offset losses from the drop in MFS High's long position.| MFS Intermediate vs. MFS Government Markets | MFS Intermediate vs. MFS Multimarket Income | MFS Intermediate vs. MFS Charter Income | MFS Intermediate vs. Putnam Premier Income |
| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Invesco High Income | MFS High vs. Blackrock Muniholdings Ny |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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