Correlation Between MFS Investment and Tri Continental

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

Diversification Opportunities for MFS Investment and Tri Continental

0.75

Correlation Coefficient

MFS Investment  Tri Continental

Poor diversification

The 3 months correlation between MFS and Tri is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Tri Continental Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tri Continental Closed 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 Tri Continental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tri Continental Closed has no effect on the direction of MFS Investment i.e., MFS Investment and Tri Continental go up and down completely randomly.

Pair Corralation between MFS Investment and Tri Continental

Considering the 90-day investment horizon MFS Investment is expected to generate 2.01 times less return on investment than Tri Continental. In addition to that, MFS Investment is 1.05 times more volatile than Tri Continental Closed. It trades about 0.16 of its total potential returns per unit of risk. Tri Continental Closed is currently generating about 0.33 per unit of volatility. If you would invest  3,145  in Tri Continental Closed on July 6, 2025 and sell it today you would earn a total of  285.00  from holding Tri Continental Closed or generate 9.06% return on investment over 90 days.

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

MFS Investment Grade  vs.  Tri Continental Closed

MFS Investment Grade

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Investment Grade are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, MFS Investment is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Tri Continental Closed

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Tri Continental Closed are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Tri Continental may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with MFS Investment and Tri Continental

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

The idea behind MFS Investment Grade and Tri Continental Closed 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.