Correlation Between Delaware Investments and MFS High

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

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

Diversification Opportunities for Delaware Investments and MFS High

0.82

Correlation Coefficient

Delaware Investments  MFS High

Very poor diversification

The 3 months correlation between Delaware and MFS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Delaware Investments Florida and MFS High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Yield and Delaware Investments 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 Delaware Investments Florida are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Yield has no effect on the direction of Delaware Investments i.e., Delaware Investments and MFS High go up and down completely randomly.

Pair Corralation between Delaware Investments and MFS High

Considering the 90-day investment horizon Delaware Investments is expected to generate 7.21 times less return on investment than MFS High. In addition to that, Delaware Investments is 1.03 times more volatile than MFS High Yield. It trades about 0.01 of its total potential returns per unit of risk. MFS High Yield is currently generating about 0.04 per unit of volatility. If you would invest  302.00  in MFS High Yield on October 12, 2024 and sell it today you would earn a total of  49.00  from holding MFS High Yield or generate 16.23% return on investment over 90 days.

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

Delaware Investments Florida  vs.  MFS High Yield

Delaware Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Delaware Investments Florida has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Delaware Investments is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

MFS High Yield

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MFS High Yield has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, MFS High is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Delaware Investments and MFS High

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

The idea behind Delaware Investments Florida and MFS High Yield 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.