Correlation Between Mfs Blended and Mfs Alabama
Can any of the company-specific risk be diversified away by investing in both Mfs Blended and Mfs Alabama 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 Blended and Mfs Alabama into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Blended Research and Mfs Alabama Municipal, you can compare the effects of market volatilities on Mfs Blended and Mfs Alabama 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 Blended with a short position of Mfs Alabama. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and Mfs Alabama.
Diversification Opportunities for Mfs Blended and Mfs Alabama
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and Mfs is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and Mfs Alabama Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Alabama Municipal and Mfs Blended 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 Blended Research are associated (or correlated) with Mfs Alabama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Alabama Municipal has no effect on the direction of Mfs Blended i.e., Mfs Blended and Mfs Alabama go up and down completely randomly.
Pair Corralation between Mfs Blended and Mfs Alabama
Assuming the 90 days horizon Mfs Blended Research is expected to generate 5.04 times more return on investment than Mfs Alabama. However, Mfs Blended is 5.04 times more volatile than Mfs Alabama Municipal. It trades about 0.05 of its potential returns per unit of risk. Mfs Alabama Municipal is currently generating about 0.05 per unit of risk. If you would invest 1,460 in Mfs Blended Research on August 29, 2024 and sell it today you would earn a total of 156.00 from holding Mfs Blended Research or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Blended Research vs. Mfs Alabama Municipal
Performance |
| Timeline |
| Mfs Blended Research |
| Mfs Alabama Municipal |
Mfs Blended and Mfs Alabama Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Blended and Mfs Alabama
The main advantage of trading using opposite Mfs Blended and Mfs Alabama positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Blended position performs unexpectedly, Mfs Alabama 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 Alabama will offset losses from the drop in Mfs Alabama's long position.| Mfs Blended vs. Ab Bond Inflation | Mfs Blended vs. T Rowe Price | Mfs Blended vs. Lord Abbett Inflation | Mfs Blended vs. Aqr Managed Futures |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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