Correlation Between Pimco Income and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Pimco Income and MFS Investment 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 Pimco Income and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pimco Income Strategy and MFS Investment Grade, you can compare the effects of market volatilities on Pimco Income and MFS Investment 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 Pimco Income with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pimco Income and MFS Investment.
Diversification Opportunities for Pimco Income and MFS Investment
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pimco and MFS is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pimco Income Strategy and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade and Pimco Income 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 Pimco Income Strategy are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Pimco Income i.e., Pimco Income and MFS Investment go up and down completely randomly.
Pair Corralation between Pimco Income and MFS Investment
Considering the 90-day investment horizon Pimco Income Strategy is expected to under-perform the MFS Investment. But the etf apears to be less risky and, when comparing its historical volatility, Pimco Income Strategy is 1.05 times less risky than MFS Investment. The etf trades about -0.06 of its potential returns per unit of risk. The MFS Investment Grade is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 800.00 in MFS Investment Grade on August 25, 2024 and sell it today you would earn a total of 10.00 from holding MFS Investment Grade or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pimco Income Strategy vs. MFS Investment Grade
Performance |
| Timeline |
| Pimco Income Strategy |
| MFS Investment Grade |
Pimco Income and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pimco Income and MFS Investment
The main advantage of trading using opposite Pimco Income and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pimco Income position performs unexpectedly, MFS Investment 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 Investment will offset losses from the drop in MFS Investment's long position.| Pimco Income vs. MFS Investment Grade | Pimco Income vs. Invesco High Income | Pimco Income vs. Eaton Vance National | Pimco Income vs. Nuveen California Select |
| MFS Investment vs. Invesco High Income | MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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