Correlation Between MFS Investment and STKd 100

Can any of the company-specific risk be diversified away by investing in both MFS Investment and STKd 100 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 Investment and STKd 100 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MFS Investment Grade and STKd 100 percent, you can compare the effects of market volatilities on MFS Investment and STKd 100 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 Investment with a short position of STKd 100. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and STKd 100.

Diversification Opportunities for MFS Investment and STKd 100

-0.35

Correlation Coefficient

MFS Investment  STKd 100

Very good diversification

The 3 months correlation between MFS and STKd is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and STKd 100 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STKd 100 percent and MFS Investment 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 Investment Grade are associated (or correlated) with STKd 100. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STKd 100 percent has no effect on the direction of MFS Investment i.e., MFS Investment and STKd 100 go up and down completely randomly.

Pair Corralation between MFS Investment and STKd 100

Considering the 90-day investment horizon MFS Investment Grade is expected to under-perform the STKd 100. But the stock apears to be less risky and, when comparing its historical volatility, MFS Investment Grade is 10.68 times less risky than STKd 100. The stock trades about -0.04 of its potential returns per unit of risk. The STKd 100 percent is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  1,797  in STKd 100 percent on May 9, 2025 and sell it today you would earn a total of  2,341  from holding STKd 100 percent or generate 130.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

MFS Investment Grade  vs.  STKd 100 percent

MFS Investment Grade

Risk-Adjusted Performance

Weakest

Over the last 90 days MFS Investment Grade has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, MFS Investment is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

STKd 100 percent

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in STKd 100 percent are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, STKd 100 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MFS Investment and STKd 100

The main advantage of trading using opposite MFS Investment and STKd 100 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, STKd 100 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 STKd 100 will offset losses from the drop in STKd 100's long position.

The idea behind MFS Investment Grade and STKd 100 percent 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.