Correlation Between Blackhawk Growth and MFS High

Can any of the company-specific risk be diversified away by investing in both Blackhawk Growth 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 Blackhawk Growth and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Blackhawk Growth Corp and MFS High Income, you can compare the effects of market volatilities on Blackhawk Growth 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 Blackhawk Growth with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackhawk Growth and MFS High.

Diversification Opportunities for Blackhawk Growth and MFS High

0.8

Correlation Coefficient

Blackhawk Growth  MFS High

Very poor diversification

The 3 months correlation between Blackhawk and MFS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Blackhawk Growth Corp 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 Blackhawk Growth 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 Blackhawk Growth Corp 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 Blackhawk Growth i.e., Blackhawk Growth and MFS High go up and down completely randomly.

Pair Corralation between Blackhawk Growth and MFS High

Assuming the 90 days horizon Blackhawk Growth Corp is expected to generate 51.17 times more return on investment than MFS High. However, Blackhawk Growth is 51.17 times more volatile than MFS High Income. It trades about 0.03 of its potential returns per unit of risk. MFS High Income is currently generating about 0.04 per unit of risk. If you would invest  31.00  in Blackhawk Growth Corp on September 18, 2024 and sell it today you would lose (30.94) from holding Blackhawk Growth Corp or give up 99.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	99.8%
Values	Daily Returns

Blackhawk Growth Corp  vs.  MFS High Income

Blackhawk Growth Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackhawk Growth Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

MFS High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS High Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MFS High is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Blackhawk Growth and MFS High

The main advantage of trading using opposite Blackhawk Growth and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackhawk Growth 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.

The idea behind Blackhawk Growth Corp and MFS High Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.