Correlation Between Swiss Helvetia and MFS Intermediate

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

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

Diversification Opportunities for Swiss Helvetia and MFS Intermediate

0.51

Correlation Coefficient

Swiss Helvetia  MFS Intermediate

Very weak diversification

The 3 months correlation between Swiss and MFS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Swiss Helvetia Closed and MFS Intermediate Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Intermediate Income and Swiss Helvetia 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 Swiss Helvetia Closed are associated (or correlated) with MFS Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Intermediate Income has no effect on the direction of Swiss Helvetia i.e., Swiss Helvetia and MFS Intermediate go up and down completely randomly.

Pair Corralation between Swiss Helvetia and MFS Intermediate

Considering the 90-day investment horizon Swiss Helvetia Closed is expected to under-perform the MFS Intermediate. In addition to that, Swiss Helvetia is 1.3 times more volatile than MFS Intermediate Income. It trades about -0.19 of its total potential returns per unit of risk. MFS Intermediate Income is currently generating about -0.02 per unit of volatility. If you would invest  274.00  in MFS Intermediate Income on September 4, 2024 and sell it today you would lose (3.00) from holding MFS Intermediate Income or give up 1.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Swiss Helvetia Closed  vs.  MFS Intermediate Income

Swiss Helvetia Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Swiss Helvetia Closed has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest uncertain performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

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.

Pair Trading with Swiss Helvetia and MFS Intermediate

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

The idea behind Swiss Helvetia Closed and MFS Intermediate Income 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.