Correlation Between MFS Investment and IShares Interest

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

By analyzing existing cross correlation between MFS Investment Grade and iShares Interest Rate, you can compare the effects of market volatilities on MFS Investment and IShares Interest 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 Investment with a short position of IShares Interest. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and IShares Interest.

Diversification Opportunities for MFS Investment and IShares Interest

0.18

Correlation Coefficient

MFS Investment  IShares Interest

Average diversification

The 3 months correlation between MFS and IShares is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and iShares Interest Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Interest Rate and MFS Investment 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 Investment Grade are associated (or correlated) with IShares Interest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Interest Rate has no effect on the direction of MFS Investment i.e., MFS Investment and IShares Interest go up and down completely randomly.

Pair Corralation between MFS Investment and IShares Interest

Considering the 90-day investment horizon MFS Investment Grade is expected to under-perform the IShares Interest. In addition to that, MFS Investment is 2.87 times more volatile than iShares Interest Rate. It trades about 0.0 of its total potential returns per unit of risk. iShares Interest Rate is currently generating about 0.23 per unit of volatility. If you would invest  8,421  in iShares Interest Rate on September 19, 2024 and sell it today you would earn a total of  225.00  from holding iShares Interest Rate or generate 2.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

MFS Investment Grade  vs.  iShares Interest Rate

MFS Investment Grade

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS Investment Grade has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, MFS Investment is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

iShares Interest Rate

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Interest Rate are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, IShares Interest is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with MFS Investment and IShares Interest

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

The idea behind MFS Investment Grade and iShares Interest Rate 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.