Correlation Between MFS Multimarket and Visa
Can any of the company-specific risk be diversified away by investing in both MFS Multimarket and Visa 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 Multimarket and Visa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Multimarket Income and Visa Class A, you can compare the effects of market volatilities on MFS Multimarket and Visa 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 Multimarket with a short position of Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Multimarket and Visa.
Diversification Opportunities for MFS Multimarket and Visa
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MFS and Visa is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding MFS Multimarket Income and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A and MFS Multimarket 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 Multimarket Income are associated (or correlated) with Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of MFS Multimarket i.e., MFS Multimarket and Visa go up and down completely randomly.
Pair Corralation between MFS Multimarket and Visa
Considering the 90-day investment horizon MFS Multimarket is expected to generate 45.29 times less return on investment than Visa. But when comparing it to its historical volatility, MFS Multimarket Income is 2.6 times less risky than Visa. It trades about 0.01 of its potential returns per unit of risk. Visa Class A is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 27,801 in Visa Class A on September 3, 2024 and sell it today you would earn a total of 3,707 from holding Visa Class A or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Multimarket Income vs. Visa Class A
Performance |
| Timeline |
| MFS Multimarket Income |
| Visa Class A |
MFS Multimarket and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Multimarket and Visa
The main advantage of trading using opposite MFS Multimarket and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Multimarket position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| MFS Multimarket vs. MFS High Yield | MFS Multimarket vs. MFS High Income | MFS Multimarket vs. MFS Intermediate Income | MFS Multimarket vs. Blackrock Muniholdings Quality |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart Holdings | Visa vs. Ally Financial |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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