Correlation Between Nuveen Mortgage and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both Nuveen Mortgage 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 Nuveen Mortgage and MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Mortgage Opportunity and MFS Municipal Income, you can compare the effects of market volatilities on Nuveen Mortgage 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 Nuveen Mortgage with a short position of MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Mortgage and MFS Municipal.
Diversification Opportunities for Nuveen Mortgage and MFS Municipal
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nuveen and MFS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Mortgage Opportunity and MFS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Municipal Income and Nuveen Mortgage 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 Mortgage Opportunity 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 Income has no effect on the direction of Nuveen Mortgage i.e., Nuveen Mortgage and MFS Municipal go up and down completely randomly.
Pair Corralation between Nuveen Mortgage and MFS Municipal
Considering the 90-day investment horizon Nuveen Mortgage Opportunity is expected to generate 0.83 times more return on investment than MFS Municipal. However, Nuveen Mortgage Opportunity is 1.2 times less risky than MFS Municipal. It trades about 0.07 of its potential returns per unit of risk. MFS Municipal Income is currently generating about 0.02 per unit of risk. If you would invest 1,799 in Nuveen Mortgage Opportunity on August 24, 2024 and sell it today you would earn a total of 15.00 from holding Nuveen Mortgage Opportunity or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Mortgage Opportunity vs. MFS Municipal Income
Performance |
| Timeline |
| Nuveen Mortgage Oppo |
| MFS Municipal Income |
Nuveen Mortgage and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Mortgage and MFS Municipal
The main advantage of trading using opposite Nuveen Mortgage and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Mortgage 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.| Nuveen Mortgage vs. Western Asset High | Nuveen Mortgage vs. Pioneer Municipal High | Nuveen Mortgage vs. The Gabelli Equity | Nuveen Mortgage vs. Eaton Vance National |
| MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. MFS Investment Grade | MFS Municipal vs. Federated Premier Municipal |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |