Correlation Between World Energy and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both World Energy 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 World Energy and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Mfs Municipal High, you can compare the effects of market volatilities on World Energy 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 World Energy with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Mfs Municipal.
Diversification Opportunities for World Energy and Mfs Municipal
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between World and Mfs is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund 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 World Energy 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 World Energy Fund 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 World Energy i.e., World Energy and Mfs Municipal go up and down completely randomly.
Pair Corralation between World Energy and Mfs Municipal
Assuming the 90 days horizon World Energy Fund is expected to generate 8.89 times more return on investment than Mfs Municipal. However, World Energy is 8.89 times more volatile than Mfs Municipal High. It trades about 0.06 of its potential returns per unit of risk. Mfs Municipal High is currently generating about 0.0 per unit of risk. If you would invest 1,498 in World Energy Fund on November 4, 2024 and sell it today you would earn a total of 32.00 from holding World Energy Fund or generate 2.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Mfs Municipal High
Performance |
| Timeline |
| World Energy |
| Mfs Municipal High |
World Energy and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Mfs Municipal
The main advantage of trading using opposite World Energy and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy 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.| World Energy vs. Invesco Gold Special | World Energy vs. World Precious Minerals | World Energy vs. Sprott Gold Equity | World Energy vs. Oppenheimer Gold Special |
| Mfs Municipal vs. Stone Ridge Diversified | Mfs Municipal vs. Tax Managed Mid Small | Mfs Municipal vs. Nasdaq 100 Fund Class | Mfs Municipal vs. Madison Diversified Income |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |