Correlation Between Mfs Diversified and Cref Inflation
Can any of the company-specific risk be diversified away by investing in both Mfs Diversified and Cref Inflation 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 Diversified and Cref Inflation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Diversified Income and Cref Inflation Linked Bond, you can compare the effects of market volatilities on Mfs Diversified and Cref Inflation 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 Diversified with a short position of Cref Inflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Diversified and Cref Inflation.
Diversification Opportunities for Mfs Diversified and Cref Inflation
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Cref is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Diversified Income and Cref Inflation Linked Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cref Inflation Linked and Mfs Diversified 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 Diversified Income are associated (or correlated) with Cref Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cref Inflation Linked has no effect on the direction of Mfs Diversified i.e., Mfs Diversified and Cref Inflation go up and down completely randomly.
Pair Corralation between Mfs Diversified and Cref Inflation
Assuming the 90 days horizon Mfs Diversified is expected to generate 1.15 times less return on investment than Cref Inflation. In addition to that, Mfs Diversified is 2.31 times more volatile than Cref Inflation Linked Bond. It trades about 0.12 of its total potential returns per unit of risk. Cref Inflation Linked Bond is currently generating about 0.33 per unit of volatility. If you would invest 8,855 in Cref Inflation Linked Bond on April 22, 2025 and sell it today you would earn a total of 80.00 from holding Cref Inflation Linked Bond or generate 0.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Mfs Diversified Income vs. Cref Inflation Linked Bond
Performance |
| Timeline |
| Mfs Diversified Income |
| Cref Inflation Linked |
Mfs Diversified and Cref Inflation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Diversified and Cref Inflation
The main advantage of trading using opposite Mfs Diversified and Cref Inflation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Diversified position performs unexpectedly, Cref Inflation 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 Cref Inflation will offset losses from the drop in Cref Inflation's long position.| Mfs Diversified vs. California Municipal Portfolio | Mfs Diversified vs. Siit High Yield | Mfs Diversified vs. Intermediate Term Tax Free Bond | Mfs Diversified vs. Touchstone Premium Yield |
| Cref Inflation vs. Aig Government Money | Cref Inflation vs. Franklin Government Securities | Cref Inflation vs. Alpine Ultra Short | Cref Inflation vs. Ab Municipal Bond |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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