Correlation Between MFS Special and HYB

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

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

Diversification Opportunities for MFS Special and HYB

0.0

Correlation Coefficient

MFS Special  HYB

Pay attention - limited upside

The 3 months correlation between MFS and HYB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MFS Special Value and HYB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYB and MFS Special 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 Special Value are associated (or correlated) with HYB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYB has no effect on the direction of MFS Special i.e., MFS Special and HYB go up and down completely randomly.

Pair Corralation between MFS Special and HYB

If you would invest  816.00  in HYB on December 25, 2024 and sell it today you would earn a total of  4.00  from holding HYB or generate 0.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

MFS Special Value  vs.  HYB

MFS Special Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFS Special Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, MFS Special is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

HYB

Risk-Adjusted Performance

Insignificant

Over the last 90 days HYB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HYB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MFS Special and HYB

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

The idea behind MFS Special Value and HYB 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.