Correlation Between First Trust and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both First Trust 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 First Trust and MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust Energy and MFS Municipal Income, you can compare the effects of market volatilities on First Trust 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 First Trust with a short position of MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and MFS Municipal.
Diversification Opportunities for First Trust and MFS Municipal
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between First and MFS is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding First Trust Energy 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 First Trust 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 First Trust Energy 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 First Trust i.e., First Trust and MFS Municipal go up and down completely randomly.
Pair Corralation between First Trust and MFS Municipal
If you would invest 550.00 in MFS Municipal Income on August 31, 2024 and sell it today you would earn a total of 16.00 from holding MFS Municipal Income or generate 2.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
First Trust Energy vs. MFS Municipal Income
Performance |
| Timeline |
| First Trust Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MFS Municipal Income |
First Trust and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and MFS Municipal
The main advantage of trading using opposite First Trust and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust 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.| First Trust vs. Eagle Point Income | First Trust vs. European Equity Closed | First Trust vs. John Hancock Income | First Trust vs. First Trust Intermediate |
| MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
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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