Correlation Between Mfs Maryland and Ishares Municipal
Can any of the company-specific risk be diversified away by investing in both Mfs Maryland and Ishares 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 Mfs Maryland and Ishares Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Maryland Municipal and Ishares Municipal Bond, you can compare the effects of market volatilities on Mfs Maryland and Ishares 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 Mfs Maryland with a short position of Ishares Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Maryland and Ishares Municipal.
Diversification Opportunities for Mfs Maryland and Ishares Municipal
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Ishares is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Maryland Municipal and Ishares Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ishares Municipal Bond and Mfs Maryland 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 Mfs Maryland Municipal are associated (or correlated) with Ishares Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ishares Municipal Bond has no effect on the direction of Mfs Maryland i.e., Mfs Maryland and Ishares Municipal go up and down completely randomly.
Pair Corralation between Mfs Maryland and Ishares Municipal
Assuming the 90 days horizon Mfs Maryland is expected to generate 1.04 times less return on investment than Ishares Municipal. In addition to that, Mfs Maryland is 1.06 times more volatile than Ishares Municipal Bond. It trades about 0.2 of its total potential returns per unit of risk. Ishares Municipal Bond is currently generating about 0.22 per unit of volatility. If you would invest 1,101 in Ishares Municipal Bond on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Ishares Municipal Bond or generate 1.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Maryland Municipal vs. Ishares Municipal Bond
Performance |
| Timeline |
| Mfs Maryland Municipal |
| Ishares Municipal Bond |
Mfs Maryland and Ishares Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Maryland and Ishares Municipal
The main advantage of trading using opposite Mfs Maryland and Ishares Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Maryland position performs unexpectedly, Ishares 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 Ishares Municipal will offset losses from the drop in Ishares Municipal's long position.| Mfs Maryland vs. Tiaa Cref Lifestyle Moderate | Mfs Maryland vs. Calvert Moderate Allocation | Mfs Maryland vs. Transamerica Cleartrack Retirement | Mfs Maryland vs. Strategic Allocation Moderate |
| Ishares Municipal vs. Ultra Short Fixed Income | Ishares Municipal vs. Icon Equity Income | Ishares Municipal vs. The Gabelli Equity | Ishares Municipal vs. Us Vector Equity |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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