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 Income, 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

0.51

Correlation Coefficient

Elysee Development  MFS High

Very weak diversification

The 3 months correlation between Elysee and MFS is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elysee Development Corp and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income 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 Income 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 Corp is expected to generate 8.04 times more return on investment than MFS High. However, Elysee Development is 8.04 times more volatile than MFS High Income. It trades about 0.03 of its potential returns per unit of risk. MFS High Income is currently generating about 0.02 per unit of risk. If you would invest  22.00  in Elysee Development Corp on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Elysee Development Corp or generate 0.0% return on investment over 90 days.

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

Elysee Development Corp  vs.  MFS High Income

Elysee Development Corp

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elysee Development Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Elysee Development may actually be approaching a critical reversion point that can send shares even higher in January 2025.

MFS High Income

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MFS High Income are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, MFS High is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

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 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..