Correlation Between Invesco Van and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Invesco Van 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 Invesco Van and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Van Kampen and MFS Investment Grade, you can compare the effects of market volatilities on Invesco Van 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 Invesco Van with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Van and MFS Investment.
Diversification Opportunities for Invesco Van and MFS Investment
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and MFS is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Van Kampen 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 Invesco Van 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 Invesco Van Kampen 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 Invesco Van i.e., Invesco Van and MFS Investment go up and down completely randomly.
Pair Corralation between Invesco Van and MFS Investment
Considering the 90-day investment horizon Invesco Van is expected to generate 2.82 times less return on investment than MFS Investment. In addition to that, Invesco Van is 1.24 times more volatile than MFS Investment Grade. It trades about 0.06 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.21 per unit of volatility. If you would invest 722.00 in MFS Investment Grade on August 28, 2024 and sell it today you would earn a total of 91.00 from holding MFS Investment Grade or generate 12.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Van Kampen vs. MFS Investment Grade
Performance |
| Timeline |
| Invesco Van Kampen |
| MFS Investment Grade |
Invesco Van and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Van and MFS Investment
The main advantage of trading using opposite Invesco Van and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Van 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.| Invesco Van vs. Western Asset High | Invesco Van vs. Voya Global Equity | Invesco Van vs. Platinum Asia Investments | Invesco Van vs. Special Opportunities Closed |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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