Correlation Between MFS Intermediate and Mexico Closed

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

By analyzing existing cross correlation between MFS Intermediate Income and Mexico Closed, you can compare the effects of market volatilities on MFS Intermediate and Mexico Closed 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 Mexico Closed. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Intermediate and Mexico Closed.

Diversification Opportunities for MFS Intermediate and Mexico Closed

0.46

Correlation Coefficient

MFS Intermediate  Mexico Closed

Very weak diversification

The 3 months correlation between MFS and Mexico is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MFS Intermediate Income and Mexico Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mexico Closed 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 Income are associated (or correlated) with Mexico Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mexico Closed has no effect on the direction of MFS Intermediate i.e., MFS Intermediate and Mexico Closed go up and down completely randomly.

Pair Corralation between MFS Intermediate and Mexico Closed

Considering the 90-day investment horizon MFS Intermediate is expected to generate 1.51 times less return on investment than Mexico Closed. But when comparing it to its historical volatility, MFS Intermediate Income is 2.85 times less risky than Mexico Closed. It trades about 0.25 of its potential returns per unit of risk. Mexico Closed is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,364  in Mexico Closed on September 17, 2024 and sell it today you would earn a total of  45.00  from holding Mexico Closed or generate 3.3% return on investment over 90 days.

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

MFS Intermediate Income  vs.  Mexico Closed

MFS Intermediate Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS Intermediate Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, MFS Intermediate is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Mexico Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mexico Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the mutual fund stockholders.

Pair Trading with MFS Intermediate and Mexico Closed

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

The idea behind MFS Intermediate Income and Mexico Closed 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..