Correlation Between Ab Bond and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Bond and Mfs Municipal 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 Ab Bond and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Bond Inflation and Mfs Municipal High, you can compare the effects of market volatilities on Ab Bond and Mfs Municipal 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 Ab Bond with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Bond and Mfs Municipal.
Diversification Opportunities for Ab Bond and Mfs Municipal
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABNOX and Mfs is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ab Bond Inflation and Mfs Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Municipal High and Ab Bond 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 Ab Bond Inflation are associated (or correlated) with Mfs Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Municipal High has no effect on the direction of Ab Bond i.e., Ab Bond and Mfs Municipal go up and down completely randomly.
Pair Corralation between Ab Bond and Mfs Municipal
Assuming the 90 days horizon Ab Bond is expected to generate 1.2 times less return on investment than Mfs Municipal. But when comparing it to its historical volatility, Ab Bond Inflation is 1.06 times less risky than Mfs Municipal. It trades about 0.06 of its potential returns per unit of risk. Mfs Municipal High is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 690.00 in Mfs Municipal High on September 4, 2024 and sell it today you would earn a total of 76.00 from holding Mfs Municipal High or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ab Bond Inflation vs. Mfs Municipal High
Performance |
| Timeline |
| Ab Bond Inflation |
| Mfs Municipal High |
Ab Bond and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Bond and Mfs Municipal
The main advantage of trading using opposite Ab Bond and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Bond position performs unexpectedly, Mfs Municipal 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 Municipal will offset losses from the drop in Mfs Municipal's long position.| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
| Mfs Municipal vs. Mfs Prudent Investor | Mfs Municipal vs. Mfs Prudent Investor | Mfs Municipal vs. Mfs Prudent Investor | Mfs Municipal vs. Mfs Prudent Investor |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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