Correlation Between MFS High and Invesco California
Can any of the company-specific risk be diversified away by investing in both MFS High and Invesco California 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 High and Invesco California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Income and Invesco California Value, you can compare the effects of market volatilities on MFS High and Invesco California 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 High with a short position of Invesco California. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Invesco California.
Diversification Opportunities for MFS High and Invesco California
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MFS and Invesco is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income and Invesco California Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco California Value and MFS High 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 High Income are associated (or correlated) with Invesco California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco California Value has no effect on the direction of MFS High i.e., MFS High and Invesco California go up and down completely randomly.
Pair Corralation between MFS High and Invesco California
Considering the 90-day investment horizon MFS High Income is expected to under-perform the Invesco California. But the stock apears to be less risky and, when comparing its historical volatility, MFS High Income is 1.52 times less risky than Invesco California. The stock trades about -0.07 of its potential returns per unit of risk. The Invesco California Value is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,053 in Invesco California Value on March 17, 2025 and sell it today you would lose (27.00) from holding Invesco California Value or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Income vs. Invesco California Value
Performance |
| Timeline |
| MFS High Income |
| Invesco California Value |
MFS High and Invesco California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Invesco California
The main advantage of trading using opposite MFS High and Invesco California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Invesco California 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 Invesco California will offset losses from the drop in Invesco California's long position.| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Blackrock Muniholdings Ny | MFS High vs. Nuveen California Select |
| Invesco California vs. Pimco California Municipal | Invesco California vs. Invesco Pennsylvania Value | Invesco California vs. Nuveen California Dividend | Invesco California vs. Invesco Advantage MIT |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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