Correlation Between MFS Investment and Blackrock Muniholdings
Can any of the company-specific risk be diversified away by investing in both MFS Investment and Blackrock Muniholdings 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 Muniholdings 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 Muniholdings Closed, you can compare the effects of market volatilities on MFS Investment and Blackrock Muniholdings 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 Muniholdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Investment and Blackrock Muniholdings.
Diversification Opportunities for MFS Investment and Blackrock Muniholdings
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Blackrock is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding MFS Investment Grade and Blackrock Muniholdings Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniholdings 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 Muniholdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniholdings has no effect on the direction of MFS Investment i.e., MFS Investment and Blackrock Muniholdings go up and down completely randomly.
Pair Corralation between MFS Investment and Blackrock Muniholdings
Considering the 90-day investment horizon MFS Investment Grade is expected to generate 0.81 times more return on investment than Blackrock Muniholdings. However, MFS Investment Grade is 1.23 times less risky than Blackrock Muniholdings. It trades about 0.13 of its potential returns per unit of risk. Blackrock Muniholdings Closed is currently generating about 0.08 per unit of risk. If you would invest 720.00 in MFS Investment Grade on September 12, 2024 and sell it today you would earn a total of 109.00 from holding MFS Investment Grade or generate 15.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
MFS Investment Grade vs. Blackrock Muniholdings Closed
Performance |
| Timeline |
| MFS Investment Grade |
| Blackrock Muniholdings |
MFS Investment and Blackrock Muniholdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Investment and Blackrock Muniholdings
The main advantage of trading using opposite MFS Investment and Blackrock Muniholdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Investment position performs unexpectedly, Blackrock Muniholdings 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 Muniholdings will offset losses from the drop in Blackrock Muniholdings' long position.| MFS Investment vs. Freedom Bank of | MFS Investment vs. HUMANA INC | MFS Investment vs. Barloworld Ltd ADR | MFS Investment vs. Morningstar Unconstrained Allocation |
| Blackrock Muniholdings vs. John Hancock Income | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. DTF Tax Free |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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