Correlation Between Bny Mellon and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both Bny Mellon 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 Bny Mellon and MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bny Mellon Municipalome and MFS Municipal Income, you can compare the effects of market volatilities on Bny Mellon 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 Bny Mellon with a short position of MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bny Mellon and MFS Municipal.
Diversification Opportunities for Bny Mellon and MFS Municipal
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Bny and MFS is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Bny Mellon Municipalome and MFS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Municipal Income and Bny Mellon 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 Bny Mellon Municipalome 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 Income has no effect on the direction of Bny Mellon i.e., Bny Mellon and MFS Municipal go up and down completely randomly.
Pair Corralation between Bny Mellon and MFS Municipal
Considering the 90-day investment horizon Bny Mellon is expected to generate 1.01 times less return on investment than MFS Municipal. But when comparing it to its historical volatility, Bny Mellon Municipalome is 1.47 times less risky than MFS Municipal. It trades about 0.06 of its potential returns per unit of risk. MFS Municipal Income is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 481.00 in MFS Municipal Income on September 2, 2024 and sell it today you would earn a total of 89.00 from holding MFS Municipal Income or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bny Mellon Municipalome vs. MFS Municipal Income
Performance |
| Timeline |
| Bny Mellon Municipalome |
| MFS Municipal Income |
Bny Mellon and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bny Mellon and MFS Municipal
The main advantage of trading using opposite Bny Mellon and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bny Mellon 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.| Bny Mellon vs. Blackrock Muniyield | Bny Mellon vs. Blackrock Muni Intermediate | Bny Mellon vs. Blackrock Muniyield Quality | Bny Mellon vs. Blackrock Muniyield Quality |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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