Correlation Between MFS Investment and BlackRock Long
Can any of the company-specific risk be diversified away by investing in both MFS Investment and BlackRock Long 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 Investment and BlackRock Long into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Investment Grade and BlackRock Long Term Municipal, you can compare the effects of market volatilities on MFS Investment and BlackRock Long 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 Investment with a short position of BlackRock Long. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and BlackRock Long.
Diversification Opportunities for MFS Investment and BlackRock Long
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and BlackRock is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and BlackRock Long Term Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Long Term and MFS Investment 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 Investment Grade are associated (or correlated) with BlackRock Long. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Long Term has no effect on the direction of MFS Investment i.e., MFS Investment and BlackRock Long go up and down completely randomly.
Pair Corralation between MFS Investment and BlackRock Long
Considering the 90-day investment horizon MFS Investment is expected to generate 1.32 times less return on investment than BlackRock Long. But when comparing it to its historical volatility, MFS Investment Grade is 1.02 times less risky than BlackRock Long. It trades about 0.19 of its potential returns per unit of risk. BlackRock Long Term Municipal is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 974.00 in BlackRock Long Term Municipal on November 9, 2024 and sell it today you would earn a total of 26.00 from holding BlackRock Long Term Municipal or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Investment Grade vs. BlackRock Long Term Municipal
Performance |
| Timeline |
| MFS Investment Grade |
| BlackRock Long Term |
MFS Investment and BlackRock Long Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and BlackRock Long
The main advantage of trading using opposite MFS Investment and BlackRock Long positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, BlackRock Long 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 Long will offset losses from the drop in BlackRock Long's long position.| MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
| BlackRock Long vs. DTF Tax Free | BlackRock Long vs. MFS High Yield | BlackRock Long vs. MFS High Income | BlackRock Long 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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