Correlation Between Goldman Sachs and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Goldman Sachs 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 Goldman Sachs and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goldman Sachs Short and Mfs Municipal Limited, you can compare the effects of market volatilities on Goldman Sachs 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 Goldman Sachs with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goldman Sachs and Mfs Municipal.
Diversification Opportunities for Goldman Sachs and Mfs Municipal
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Goldman and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Goldman Sachs Short 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 Goldman Sachs 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 Goldman Sachs Short 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 Goldman Sachs i.e., Goldman Sachs and Mfs Municipal go up and down completely randomly.
Pair Corralation between Goldman Sachs and Mfs Municipal
Assuming the 90 days horizon Goldman Sachs Short is expected to generate 0.86 times more return on investment than Mfs Municipal. However, Goldman Sachs Short is 1.16 times less risky than Mfs Municipal. It trades about 0.13 of its potential returns per unit of risk. Mfs Municipal Limited is currently generating about 0.09 per unit of risk. If you would invest 971.00 in Goldman Sachs Short on September 4, 2024 and sell it today you would earn a total of 66.00 from holding Goldman Sachs Short or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goldman Sachs Short vs. Mfs Municipal Limited
Performance |
| Timeline |
| Goldman Sachs Short |
| Mfs Municipal Limited |
Goldman Sachs and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goldman Sachs and Mfs Municipal
The main advantage of trading using opposite Goldman Sachs and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goldman Sachs 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.| Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean | Goldman Sachs vs. Goldman Sachs Clean |
| Mfs Municipal vs. Siit High Yield | Mfs Municipal vs. Dunham High Yield | Mfs Municipal vs. American Century High | Mfs Municipal vs. Calvert High Yield |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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