Correlation Between Invesco Trust and MFS High
Can any of the company-specific risk be diversified away by investing in both Invesco Trust and MFS High 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 Trust and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Trust For and MFS High Income, you can compare the effects of market volatilities on Invesco Trust and MFS High 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 Trust with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Trust and MFS High.
Diversification Opportunities for Invesco Trust and MFS High
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Invesco and MFS is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Trust For and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income and Invesco Trust 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 Trust For are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of Invesco Trust i.e., Invesco Trust and MFS High go up and down completely randomly.
Pair Corralation between Invesco Trust and MFS High
Considering the 90-day investment horizon Invesco Trust For is expected to generate 0.9 times more return on investment than MFS High. However, Invesco Trust For is 1.11 times less risky than MFS High. It trades about 0.01 of its potential returns per unit of risk. MFS High Income is currently generating about -0.06 per unit of risk. If you would invest 1,004 in Invesco Trust For on October 26, 2024 and sell it today you would earn a total of 2.00 from holding Invesco Trust For or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Trust For vs. MFS High Income
Performance |
| Timeline |
| Invesco Trust For |
| MFS High Income |
Invesco Trust and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Trust and MFS High
The main advantage of trading using opposite Invesco Trust and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Trust position performs unexpectedly, MFS High 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 High will offset losses from the drop in MFS High's long position.| Invesco Trust vs. Invesco Municipal Income | Invesco Trust vs. DWS Municipal Income | Invesco Trust vs. MFS Municipal Income | Invesco Trust vs. MFS High Income |
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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