Correlation Between Hennessy and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Hennessy 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 Hennessy and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hennessy Bp Energy and Mfs Municipal High, you can compare the effects of market volatilities on Hennessy 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 Hennessy with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hennessy and Mfs Municipal.
Diversification Opportunities for Hennessy and Mfs Municipal
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hennessy and Mfs is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Hennessy Bp Energy and Mfs Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Municipal High and Hennessy 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 Hennessy Bp 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 High has no effect on the direction of Hennessy i.e., Hennessy and Mfs Municipal go up and down completely randomly.
Pair Corralation between Hennessy and Mfs Municipal
Assuming the 90 days horizon Hennessy Bp Energy is expected to generate 4.33 times more return on investment than Mfs Municipal. However, Hennessy is 4.33 times more volatile than Mfs Municipal High. It trades about 0.05 of its potential returns per unit of risk. Mfs Municipal High is currently generating about 0.0 per unit of risk. If you would invest 2,735 in Hennessy Bp Energy on November 4, 2024 and sell it today you would earn a total of 27.00 from holding Hennessy Bp Energy or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hennessy Bp Energy vs. Mfs Municipal High
Performance |
| Timeline |
| Hennessy Bp Energy |
| Mfs Municipal High |
Hennessy and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hennessy and Mfs Municipal
The main advantage of trading using opposite Hennessy and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hennessy 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.| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
| Mfs Municipal vs. Stone Ridge Diversified | Mfs Municipal vs. Tax Managed Mid Small | Mfs Municipal vs. Nasdaq 100 Fund Class | Mfs Municipal vs. Madison Diversified Income |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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