Correlation Between Calvert High and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Calvert High and Mfs Municipal 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 Calvert High and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calvert High Yield and Mfs Municipal Limited, you can compare the effects of market volatilities on Calvert High and Mfs Municipal 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 Calvert High with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calvert High and Mfs Municipal.
Diversification Opportunities for Calvert High and Mfs Municipal
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calvert and Mfs is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Calvert High Yield and Mfs Municipal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Municipal Limited and Calvert 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 Calvert High Yield are associated (or correlated) with Mfs Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Municipal Limited has no effect on the direction of Calvert High i.e., Calvert High and Mfs Municipal go up and down completely randomly.
Pair Corralation between Calvert High and Mfs Municipal
Assuming the 90 days horizon Calvert High Yield is expected to generate 1.83 times more return on investment than Mfs Municipal. However, Calvert High is 1.83 times more volatile than Mfs Municipal Limited. It trades about 0.18 of its potential returns per unit of risk. Mfs Municipal Limited is currently generating about 0.14 per unit of risk. If you would invest 2,192 in Calvert High Yield on September 12, 2024 and sell it today you would earn a total of 312.00 from holding Calvert High Yield or generate 14.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Calvert High Yield vs. Mfs Municipal Limited
Performance |
| Timeline |
| Calvert High Yield |
| Mfs Municipal Limited |
Calvert High and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Calvert High and Mfs Municipal
The main advantage of trading using opposite Calvert High and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calvert High position performs unexpectedly, Mfs Municipal 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 Mfs Municipal will offset losses from the drop in Mfs Municipal's long position.| Calvert High vs. Locorr Dynamic Equity | Calvert High vs. Balanced Fund Retail | Calvert High vs. Us Strategic Equity | Calvert High vs. Gmo Global Equity |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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