Correlation Between NYSE Composite and Mfs Mid
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mfs Mid 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 Mid 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 Mid Cap, you can compare the effects of market volatilities on NYSE Composite and Mfs Mid 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 Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mfs Mid.
Diversification Opportunities for NYSE Composite and Mfs Mid
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NYSE and Mfs is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mfs Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Mid Cap 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 Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Mid Cap has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mfs Mid go up and down completely randomly.
Pair Corralation between NYSE Composite and Mfs Mid
Assuming the 90 days trading horizon NYSE Composite is expected to generate 2.24 times less return on investment than Mfs Mid. But when comparing it to its historical volatility, NYSE Composite is 1.65 times less risky than Mfs Mid. It trades about 0.23 of its potential returns per unit of risk. Mfs Mid Cap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 2,250 in Mfs Mid Cap on August 29, 2024 and sell it today you would earn a total of 173.00 from holding Mfs Mid Cap or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mfs Mid Cap
Performance |
| Timeline |
NYSE Composite and Mfs Mid Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mfs Mid Cap
Pair trading matchups for Mfs Mid
Pair Trading with NYSE Composite and Mfs Mid
The main advantage of trading using opposite NYSE Composite and Mfs Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mfs Mid 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 Mid will offset losses from the drop in Mfs Mid's long position.| NYSE Composite vs. Sphere Entertainment Co | NYSE Composite vs. Weibo Corp | NYSE Composite vs. BCE Inc | NYSE Composite vs. Pinterest |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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