Correlation Between NYSE Composite and MFS Multimarket
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and MFS Multimarket 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 Multimarket 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 Multimarket Income, you can compare the effects of market volatilities on NYSE Composite and MFS Multimarket 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 Multimarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and MFS Multimarket.
Diversification Opportunities for NYSE Composite and MFS Multimarket
0.17 | Correlation Coefficient |
Average 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 Multimarket Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Multimarket Income 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 Multimarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Multimarket Income has no effect on the direction of NYSE Composite i.e., NYSE Composite and MFS Multimarket go up and down completely randomly.
Pair Corralation between NYSE Composite and MFS Multimarket
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.24 times more return on investment than MFS Multimarket. However, NYSE Composite is 1.24 times more volatile than MFS Multimarket Income. It trades about 0.24 of its potential returns per unit of risk. MFS Multimarket Income is currently generating about -0.05 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 27, 2024 and sell it today you would earn a total of 67,069 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. MFS Multimarket Income
Performance |
| Timeline |
NYSE Composite and MFS Multimarket Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
MFS Multimarket Income
Pair trading matchups for MFS Multimarket
Pair Trading with NYSE Composite and MFS Multimarket
The main advantage of trading using opposite NYSE Composite and MFS Multimarket positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, MFS Multimarket 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 Multimarket will offset losses from the drop in MFS Multimarket's long position.| NYSE Composite vs. Hooker Furniture | NYSE Composite vs. Hudson Pacific Properties | NYSE Composite vs. Canlan Ice Sports | NYSE Composite vs. Boston Properties |
| MFS Multimarket vs. MFS High Yield | MFS Multimarket vs. MFS High Income | MFS Multimarket vs. MFS Intermediate Income | MFS Multimarket vs. Blackrock Muniholdings Quality |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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