Correlation Between Invesco Global and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Invesco Global 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 Invesco Global and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Global Health and Mfs Municipal Limited, you can compare the effects of market volatilities on Invesco Global 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 Invesco Global with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and Mfs Municipal.
Diversification Opportunities for Invesco Global and Mfs Municipal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Invesco and Mfs is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Health 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 Invesco Global 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 Invesco Global Health 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 Invesco Global i.e., Invesco Global and Mfs Municipal go up and down completely randomly.
Pair Corralation between Invesco Global and Mfs Municipal
Assuming the 90 days horizon Invesco Global Health is expected to generate 7.59 times more return on investment than Mfs Municipal. However, Invesco Global is 7.59 times more volatile than Mfs Municipal Limited. It trades about 0.23 of its potential returns per unit of risk. Mfs Municipal Limited is currently generating about 0.12 per unit of risk. If you would invest 1,740 in Invesco Global Health on October 25, 2024 and sell it today you would earn a total of 63.00 from holding Invesco Global Health or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Global Health vs. Mfs Municipal Limited
Performance |
| Timeline |
| Invesco Global Health |
| Mfs Municipal Limited |
Invesco Global and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and Mfs Municipal
The main advantage of trading using opposite Invesco Global and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global 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.| Invesco Global vs. Ab Municipal Bond | Invesco Global vs. Old Westbury Municipal | Invesco Global vs. Transamerica Intermediate Muni | Invesco Global vs. Blrc Sgy Mnp |
| Mfs Municipal vs. Energy Services Fund | Mfs Municipal vs. Virtus Select Mlp | Mfs Municipal vs. Cohen Steers Mlp | Mfs Municipal vs. Vanguard Energy Index |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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