Correlation Between MFS Charter and MFS Multimarket

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

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

Diversification Opportunities for MFS Charter and MFS Multimarket

0.97

Correlation Coefficient

MFS Charter  MFS Multimarket

Almost no diversification

The 3 months correlation between MFS and MFS is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding MFS Charter Income and MFS Multimarket Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Multimarket Income and MFS Charter 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 Charter Income are associated (or correlated) with MFS Multimarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Multimarket Income has no effect on the direction of MFS Charter i.e., MFS Charter and MFS Multimarket go up and down completely randomly.

Pair Corralation between MFS Charter and MFS Multimarket

Considering the 90-day investment horizon MFS Charter Income is expected to generate 1.0 times more return on investment than MFS Multimarket. However, MFS Charter Income is 1.0 times less risky than MFS Multimarket. It trades about 0.27 of its potential returns per unit of risk. MFS Multimarket Income is currently generating about 0.21 per unit of risk. If you would invest  593.00  in MFS Charter Income on April 23, 2025 and sell it today you would earn a total of  37.00  from holding MFS Charter Income or generate 6.24% return on investment over 90 days.

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

MFS Charter Income  vs.  MFS Multimarket Income

MFS Charter Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Charter Income are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable fundamental indicators, MFS Charter is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

MFS Multimarket Income

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Multimarket Income are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, MFS Multimarket 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 Charter and MFS Multimarket

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

The idea behind MFS Charter Income and MFS Multimarket Income 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.