Correlation Between MFS Investment and Exchange Listed

Can any of the company-specific risk be diversified away by investing in both MFS Investment and Exchange Listed 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 Exchange Listed 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 Exchange Listed Funds, you can compare the effects of market volatilities on MFS Investment and Exchange Listed 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 Exchange Listed. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Exchange Listed.

Diversification Opportunities for MFS Investment and Exchange Listed

-0.34

Correlation Coefficient

MFS Investment  Exchange Listed

Very good diversification

The 3 months correlation between MFS and Exchange is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Exchange Listed Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Listed Funds 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 Exchange Listed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Listed Funds has no effect on the direction of MFS Investment i.e., MFS Investment and Exchange Listed go up and down completely randomly.

Pair Corralation between MFS Investment and Exchange Listed

Considering the 90-day investment horizon MFS Investment Grade is expected to under-perform the Exchange Listed. But the stock apears to be less risky and, when comparing its historical volatility, MFS Investment Grade is 2.61 times less risky than Exchange Listed. The stock trades about -0.03 of its potential returns per unit of risk. The Exchange Listed Funds is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  2,533  in Exchange Listed Funds on May 11, 2025 and sell it today you would earn a total of  46.00  from holding Exchange Listed Funds or generate 1.82% return on investment over 90 days.

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

MFS Investment Grade  vs.  Exchange Listed Funds

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.

Exchange Listed Funds

Risk-Adjusted Performance

Weak

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

Pair Trading with MFS Investment and Exchange Listed

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

The idea behind MFS Investment Grade and Exchange Listed Funds 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.

Check out your portfolio center.

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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.