Correlation Between Nuveen Minnesota and Mfs Maryland
Can any of the company-specific risk be diversified away by investing in both Nuveen Minnesota and Mfs Maryland 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 Nuveen Minnesota and Mfs Maryland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Minnesota Municipal and Mfs Maryland Municipal, you can compare the effects of market volatilities on Nuveen Minnesota and Mfs Maryland 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 Nuveen Minnesota with a short position of Mfs Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Minnesota and Mfs Maryland.
Diversification Opportunities for Nuveen Minnesota and Mfs Maryland
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and Mfs is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and Mfs Maryland Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Maryland Municipal and Nuveen Minnesota 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 Nuveen Minnesota Municipal are associated (or correlated) with Mfs Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Maryland Municipal has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and Mfs Maryland go up and down completely randomly.
Pair Corralation between Nuveen Minnesota and Mfs Maryland
Assuming the 90 days horizon Nuveen Minnesota Municipal is expected to generate 0.98 times more return on investment than Mfs Maryland. However, Nuveen Minnesota Municipal is 1.02 times less risky than Mfs Maryland. It trades about 0.22 of its potential returns per unit of risk. Mfs Maryland Municipal is currently generating about 0.2 per unit of risk. If you would invest 1,074 in Nuveen Minnesota Municipal on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Nuveen Minnesota Municipal or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Minnesota Municipal vs. Mfs Maryland Municipal
Performance |
| Timeline |
| Nuveen Minnesota Mun |
| Mfs Maryland Municipal |
Nuveen Minnesota and Mfs Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Minnesota and Mfs Maryland
The main advantage of trading using opposite Nuveen Minnesota and Mfs Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Minnesota position performs unexpectedly, Mfs Maryland 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 Maryland will offset losses from the drop in Mfs Maryland's long position.| Nuveen Minnesota vs. Energy Basic Materials | Nuveen Minnesota vs. Clearbridge Energy Mlp | Nuveen Minnesota vs. Short Oil Gas | Nuveen Minnesota vs. Hennessy Bp Energy |
| Mfs Maryland vs. Tiaa Cref Lifestyle Moderate | Mfs Maryland vs. Calvert Moderate Allocation | Mfs Maryland vs. Transamerica Cleartrack Retirement | Mfs Maryland vs. Strategic Allocation Moderate |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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