Correlation Between Korea Closed and MFS High

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

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

Diversification Opportunities for Korea Closed and MFS High

0.43

Correlation Coefficient

Korea Closed  MFS High

Very weak diversification

The 3 months correlation between Korea and MFS is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Korea Closed 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 Korea Closed 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 Korea Closed 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 Korea Closed i.e., Korea Closed and MFS High go up and down completely randomly.

Pair Corralation between Korea Closed and MFS High

Allowing for the 90-day total investment horizon Korea Closed is expected to under-perform the MFS High. In addition to that, Korea Closed is 1.98 times more volatile than MFS High Income. It trades about -0.2 of its total potential returns per unit of risk. MFS High Income is currently generating about 0.02 per unit of volatility. If you would invest  385.00  in MFS High Income on September 3, 2024 and sell it today you would earn a total of  3.00  from holding MFS High Income or generate 0.78% return on investment over 90 days.

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

Korea Closed  vs.  MFS High Income

Korea Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korea Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite unsteady performance in the last few months, the Fund's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the mutual fund stockholders.

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 Korea Closed and MFS High

The main advantage of trading using opposite Korea Closed and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Closed 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 Korea Closed 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.

Check out your portfolio center.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.