Correlation Between MFS Special and Rivernorth Opportunities

Can any of the company-specific risk be diversified away by investing in both MFS Special and Rivernorth Opportunities 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 Rivernorth Opportunities 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 Rivernorth Opportunities, you can compare the effects of market volatilities on MFS Special and Rivernorth Opportunities 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 Rivernorth Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Special and Rivernorth Opportunities.

Diversification Opportunities for MFS Special and Rivernorth Opportunities

-0.59

Correlation Coefficient

MFS Special  Rivernorth Opportunities

Excellent diversification

The 3 months correlation between MFS and Rivernorth is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding MFS Special Value and Rivernorth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rivernorth Opportunities 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 Rivernorth Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rivernorth Opportunities has no effect on the direction of MFS Special i.e., MFS Special and Rivernorth Opportunities go up and down completely randomly.

Pair Corralation between MFS Special and Rivernorth Opportunities

If you would invest  955.00  in Rivernorth Opportunities on September 4, 2024 and sell it today you would earn a total of  311.00  from holding Rivernorth Opportunities or generate 32.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.4%
Values	Daily Returns

MFS Special Value  vs.  Rivernorth Opportunities

MFS Special Value

Risk-Adjusted Performance

0 of 100

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.

Rivernorth Opportunities

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rivernorth Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable forward indicators, Rivernorth Opportunities is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with MFS Special and Rivernorth Opportunities

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

The idea behind MFS Special Value and Rivernorth Opportunities 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 CEOs Directory module to screen CEOs from public companies around the world.