Correlation Between Lord Abbett and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Lord Abbett 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 Lord Abbett and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett High and Mfs Municipal Limited, you can compare the effects of market volatilities on Lord Abbett 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 Lord Abbett with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Mfs Municipal.
Diversification Opportunities for Lord Abbett and Mfs Municipal
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Lord and Mfs is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High 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 Lord Abbett 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 Lord Abbett High 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 Lord Abbett i.e., Lord Abbett and Mfs Municipal go up and down completely randomly.
Pair Corralation between Lord Abbett and Mfs Municipal
Assuming the 90 days horizon Lord Abbett is expected to generate 4.03 times less return on investment than Mfs Municipal. In addition to that, Lord Abbett is 2.09 times more volatile than Mfs Municipal Limited. It trades about 0.06 of its total potential returns per unit of risk. Mfs Municipal Limited is currently generating about 0.55 per unit of volatility. If you would invest 798.00 in Mfs Municipal Limited on September 13, 2024 and sell it today you would earn a total of 5.00 from holding Mfs Municipal Limited or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett High vs. Mfs Municipal Limited
Performance |
| Timeline |
| Lord Abbett High |
| Mfs Municipal Limited |
Lord Abbett and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Mfs Municipal
The main advantage of trading using opposite Lord Abbett and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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.| Lord Abbett vs. Qs Moderate Growth | Lord Abbett vs. Franklin Growth Opportunities | Lord Abbett vs. Qs Growth Fund | Lord Abbett vs. Smallcap Growth Fund |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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