Correlation Between Fiera Capital and MFS High

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

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

Diversification Opportunities for Fiera Capital and MFS High

-0.28

Correlation Coefficient

Fiera Capital  MFS High

Very good diversification

The 3 months correlation between Fiera and MFS is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fiera Capital 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 Fiera Capital 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 Fiera Capital 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 Fiera Capital i.e., Fiera Capital and MFS High go up and down completely randomly.

Pair Corralation between Fiera Capital and MFS High

Assuming the 90 days horizon Fiera Capital is expected to generate 3.56 times more return on investment than MFS High. However, Fiera Capital is 3.56 times more volatile than MFS High Yield. It trades about 0.16 of its potential returns per unit of risk. MFS High Yield is currently generating about 0.03 per unit of risk. If you would invest  550.00  in Fiera Capital on September 13, 2024 and sell it today you would earn a total of  111.00  from holding Fiera Capital or generate 20.18% return on investment over 90 days.

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

Fiera Capital  vs.  MFS High Yield

Fiera Capital

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fiera Capital are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Fiera Capital reported solid returns over the last few months and may actually be approaching a breakup point.

MFS High Yield

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in MFS High Yield are ranked lower than 2 (%) 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 Fiera Capital and MFS High

The main advantage of trading using opposite Fiera Capital and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fiera Capital 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 Fiera Capital 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.