Correlation Between MFS High and Eaton Vance

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

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

Diversification Opportunities for MFS High and Eaton Vance

0.62

Correlation Coefficient

MFS High  Eaton Vance

Poor diversification

The 3 months correlation between MFS and Eaton is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and MFS High 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 High Income are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance National has no effect on the direction of MFS High i.e., MFS High and Eaton Vance go up and down completely randomly.

Pair Corralation between MFS High and Eaton Vance

Considering the 90-day investment horizon MFS High Income is expected to generate 1.15 times more return on investment than Eaton Vance. However, MFS High is 1.15 times more volatile than Eaton Vance National. It trades about -0.02 of its potential returns per unit of risk. Eaton Vance National is currently generating about -0.09 per unit of risk. If you would invest  352.00  in MFS High Income on April 30, 2025 and sell it today you would lose (3.00) from holding MFS High Income or give up 0.85% of portfolio value over 90 days.

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

MFS High Income  vs.  Eaton Vance National

MFS High Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days MFS High Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, MFS High is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Eaton Vance National

Risk-Adjusted Performance

Very Weak

Over the last 90 days Eaton Vance National has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Eaton Vance 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 MFS High and Eaton Vance

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

The idea behind MFS High Income and Eaton Vance National 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.