Correlation Between Federated Hermes and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Federated Hermes 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 Federated Hermes and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Hermes Inflation and Mfs Municipal Limited, you can compare the effects of market volatilities on Federated Hermes 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 Federated Hermes with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Hermes and Mfs Municipal.
Diversification Opportunities for Federated Hermes and Mfs Municipal
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Federated and Mfs is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Federated Hermes Inflation 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 Federated Hermes 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 Federated Hermes Inflation 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 Federated Hermes i.e., Federated Hermes and Mfs Municipal go up and down completely randomly.
Pair Corralation between Federated Hermes and Mfs Municipal
Assuming the 90 days horizon Federated Hermes Inflation is expected to under-perform the Mfs Municipal. In addition to that, Federated Hermes is 1.9 times more volatile than Mfs Municipal Limited. It trades about -0.04 of its total potential returns per unit of risk. Mfs Municipal Limited is currently generating about 0.04 per unit of volatility. If you would invest 801.00 in Mfs Municipal Limited on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Mfs Municipal Limited or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Hermes Inflation vs. Mfs Municipal Limited
Performance |
| Timeline |
| Federated Hermes Inf |
| Mfs Municipal Limited |
Federated Hermes and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Hermes and Mfs Municipal
The main advantage of trading using opposite Federated Hermes and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Hermes 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.| Federated Hermes vs. Gabelli Convertible And | Federated Hermes vs. Putnam Convertible Incm Gwth | Federated Hermes vs. Allianzgi Convertible Income | Federated Hermes vs. Rationalpier 88 Convertible |
| Mfs Municipal vs. Deutsche Real Estate | Mfs Municipal vs. Redwood Real Estate | Mfs Municipal vs. Short Real Estate | Mfs Municipal vs. Pender Real Estate |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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