Correlation Between MFS High and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both MFS High and Blackrock Muniyield 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 Blackrock Muniyield into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Yield and Blackrock Muniyield Quality, you can compare the effects of market volatilities on MFS High and Blackrock Muniyield 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 Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Blackrock Muniyield.
Diversification Opportunities for MFS High and Blackrock Muniyield
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Blackrock is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Yield and Blackrock Muniyield Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield 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 Yield are associated (or correlated) with Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of MFS High i.e., MFS High and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between MFS High and Blackrock Muniyield
Considering the 90-day investment horizon MFS High Yield is expected to generate 1.35 times more return on investment than Blackrock Muniyield. However, MFS High is 1.35 times more volatile than Blackrock Muniyield Quality. It trades about 0.05 of its potential returns per unit of risk. Blackrock Muniyield Quality is currently generating about 0.03 per unit of risk. If you would invest 295.00 in MFS High Yield on August 27, 2024 and sell it today you would earn a total of 60.00 from holding MFS High Yield or generate 20.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Yield vs. Blackrock Muniyield Quality
Performance |
| Timeline |
| MFS High Yield |
| Blackrock Muniyield |
MFS High and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Blackrock Muniyield
The main advantage of trading using opposite MFS High and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield's long position.| MFS High vs. PowerUp Acquisition Corp | MFS High vs. Aurora Innovation | MFS High vs. HUMANA INC | MFS High vs. Aquagold International |
| Blackrock Muniyield vs. John Hancock Income | Blackrock Muniyield vs. MFS High Income | Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Blackrock Muniholdings Closed |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |