Correlation Between Elysee Development and MFS High

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

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

Diversification Opportunities for Elysee Development and MFS High

0.5

Correlation Coefficient

Elysee Development  MFS High

Very weak diversification

The 3 months correlation between Elysee and MFS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Elysee Development Corp and MFS High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Yield and Elysee Development 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 Elysee Development Corp are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Yield has no effect on the direction of Elysee Development i.e., Elysee Development and MFS High go up and down completely randomly.

Pair Corralation between Elysee Development and MFS High

Assuming the 90 days horizon Elysee Development is expected to generate 25.69 times less return on investment than MFS High. In addition to that, Elysee Development is 10.15 times more volatile than MFS High Yield. It trades about 0.0 of its total potential returns per unit of risk. MFS High Yield is currently generating about 0.07 per unit of volatility. If you would invest  356.00  in MFS High Yield on September 4, 2024 and sell it today you would earn a total of  9.00  from holding MFS High Yield or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Elysee Development Corp  vs.  MFS High Yield

Elysee Development Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elysee Development Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Elysee Development is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

MFS High Yield

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MFS High Yield are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable primary indicators, MFS High 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 Elysee Development and MFS High

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

The idea behind Elysee Development Corp and MFS High Yield 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .