Correlation Between NYSE Composite and MFS Active
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and MFS Active 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 NYSE Composite and MFS Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and MFS Active Exchange, you can compare the effects of market volatilities on NYSE Composite and MFS Active 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 NYSE Composite with a short position of MFS Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and MFS Active.
Diversification Opportunities for NYSE Composite and MFS Active
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and MFS is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and MFS Active Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active Exchange and NYSE Composite 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 NYSE Composite are associated (or correlated) with MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active Exchange has no effect on the direction of NYSE Composite i.e., NYSE Composite and MFS Active go up and down completely randomly.
Pair Corralation between NYSE Composite and MFS Active
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.29 times more return on investment than MFS Active. However, NYSE Composite is 4.29 times more volatile than MFS Active Exchange. It trades about 0.2 of its potential returns per unit of risk. MFS Active Exchange is currently generating about 0.14 per unit of risk. If you would invest 1,934,148 in NYSE Composite on October 25, 2024 and sell it today you would earn a total of 48,614 from holding NYSE Composite or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. MFS Active Exchange
Performance |
| Timeline |
NYSE Composite and MFS Active Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
MFS Active Exchange
Pair trading matchups for MFS Active
Pair Trading with NYSE Composite and MFS Active
The main advantage of trading using opposite NYSE Composite and MFS Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, MFS Active 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 Active will offset losses from the drop in MFS Active's long position.| NYSE Composite vs. Tesla Inc | NYSE Composite vs. Sea | NYSE Composite vs. NETGEAR | NYSE Composite vs. Gentex |
| MFS Active vs. SSGA Active Trust | MFS Active vs. SPDR Nuveen Municipal | MFS Active vs. iShares Short Maturity | MFS Active vs. First Trust Flexible |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |