Correlation Between Mfs Intermediate and Equus Total

Can any of the company-specific risk be diversified away by investing in both Mfs Intermediate and Equus Total 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 Mfs Intermediate and Equus Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mfs Intermediate High and Equus Total Return, you can compare the effects of market volatilities on Mfs Intermediate and Equus Total 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 Mfs Intermediate with a short position of Equus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Intermediate and Equus Total.

Diversification Opportunities for Mfs Intermediate and Equus Total

0.6

Correlation Coefficient

Mfs Intermediate  Equus Total

Poor diversification

The 3 months correlation between Mfs and Equus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Intermediate High and Equus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equus Total Return and Mfs Intermediate 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 Mfs Intermediate High are associated (or correlated) with Equus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equus Total Return has no effect on the direction of Mfs Intermediate i.e., Mfs Intermediate and Equus Total go up and down completely randomly.

Pair Corralation between Mfs Intermediate and Equus Total

Considering the 90-day investment horizon Mfs Intermediate High is expected to generate 0.14 times more return on investment than Equus Total. However, Mfs Intermediate High is 7.24 times less risky than Equus Total. It trades about 0.0 of its potential returns per unit of risk. Equus Total Return is currently generating about -0.02 per unit of risk. If you would invest  170.00  in Mfs Intermediate High on December 26, 2024 and sell it today you would earn a total of  0.00  from holding Mfs Intermediate High or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Mfs Intermediate High  vs.  Equus Total Return

Mfs Intermediate High

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Intermediate High has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable forward indicators, Mfs Intermediate is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Equus Total Return

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equus Total Return has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Mfs Intermediate and Equus Total

The main advantage of trading using opposite Mfs Intermediate and Equus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Intermediate position performs unexpectedly, Equus Total 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 Equus Total will offset losses from the drop in Equus Total's long position.

The idea behind Mfs Intermediate High and Equus Total Return 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.