Correlation Between MFS High and Munivest Fund
Can any of the company-specific risk be diversified away by investing in both MFS High and Munivest Fund 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 Munivest Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS High Income and Munivest Fund, you can compare the effects of market volatilities on MFS High and Munivest Fund 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 Munivest Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS High and Munivest Fund.
Diversification Opportunities for MFS High and Munivest Fund
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MFS and Munivest is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MFS High Income and Munivest Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Munivest Fund 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 Income are associated (or correlated) with Munivest Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Munivest Fund has no effect on the direction of MFS High i.e., MFS High and Munivest Fund go up and down completely randomly.
Pair Corralation between MFS High and Munivest Fund
Considering the 90-day investment horizon MFS High Income is expected to under-perform the Munivest Fund. But the stock apears to be less risky and, when comparing its historical volatility, MFS High Income is 1.11 times less risky than Munivest Fund. The stock trades about -0.03 of its potential returns per unit of risk. The Munivest Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 719.00 in Munivest Fund on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Munivest Fund or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS High Income vs. Munivest Fund
Performance |
| Timeline |
| MFS High Income |
| Munivest Fund |
MFS High and Munivest Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS High and Munivest Fund
The main advantage of trading using opposite MFS High and Munivest Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS High position performs unexpectedly, Munivest Fund 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 Munivest Fund will offset losses from the drop in Munivest Fund's long position.| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Invesco High Income | MFS High vs. Blackrock Muniholdings Ny |
| Munivest Fund vs. DTF Tax Free | Munivest Fund vs. MFS High Yield | Munivest Fund vs. MFS High Income | Munivest Fund vs. John Hancock 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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