Correlation Between MFS High and Nuveen Massachusetts
Can any of the company-specific risk be diversified away by investing in both MFS High and Nuveen Massachusetts 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 Nuveen Massachusetts 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 Nuveen Massachusetts Quality, you can compare the effects of market volatilities on MFS High and Nuveen Massachusetts 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 Nuveen Massachusetts. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Nuveen Massachusetts.
Diversification Opportunities for MFS High and Nuveen Massachusetts
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between MFS and Nuveen is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Yield and Nuveen Massachusetts Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Massachusetts 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 Nuveen Massachusetts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Massachusetts has no effect on the direction of MFS High i.e., MFS High and Nuveen Massachusetts go up and down completely randomly.
Pair Corralation between MFS High and Nuveen Massachusetts
Considering the 90-day investment horizon MFS High Yield is expected to generate 1.3 times more return on investment than Nuveen Massachusetts. However, MFS High is 1.3 times more volatile than Nuveen Massachusetts Quality. It trades about 0.08 of its potential returns per unit of risk. Nuveen Massachusetts Quality is currently generating about 0.1 per unit of risk. If you would invest 299.00 in MFS High Yield on September 1, 2024 and sell it today you would earn a total of 66.00 from holding MFS High Yield or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
MFS High Yield vs. Nuveen Massachusetts Quality
Performance |
| Timeline |
| MFS High Yield |
| Nuveen Massachusetts |
MFS High and Nuveen Massachusetts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Nuveen Massachusetts
The main advantage of trading using opposite MFS High and Nuveen Massachusetts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Nuveen Massachusetts 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 Nuveen Massachusetts will offset losses from the drop in Nuveen Massachusetts' long position.| MFS High vs. MFS Investment Grade | MFS High vs. MFS Municipal Income | MFS High vs. DTF Tax Free | MFS High vs. MFS Government Markets |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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