Correlation Between Mfs Maryland and Nuveen Minnesota
Can any of the company-specific risk be diversified away by investing in both Mfs Maryland and Nuveen Minnesota 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 Nuveen Minnesota 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 Nuveen Minnesota Municipal, you can compare the effects of market volatilities on Mfs Maryland and Nuveen Minnesota 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 Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Maryland and Nuveen Minnesota.
Diversification Opportunities for Mfs Maryland and Nuveen Minnesota
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Nuveen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Maryland Municipal and Nuveen Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Mun 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 Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Mun has no effect on the direction of Mfs Maryland i.e., Mfs Maryland and Nuveen Minnesota go up and down completely randomly.
Pair Corralation between Mfs Maryland and Nuveen Minnesota
Assuming the 90 days horizon Mfs Maryland is expected to generate 1.07 times less return on investment than Nuveen Minnesota. In addition to that, Mfs Maryland is 1.02 times more volatile than Nuveen Minnesota Municipal. It trades about 0.2 of its total potential returns per unit of risk. Nuveen Minnesota Municipal is currently generating about 0.22 per unit of volatility. If you would invest 1,074 in Nuveen Minnesota Municipal on September 1, 2024 and sell it today you would earn a total of 16.00 from holding Nuveen Minnesota Municipal or generate 1.49% 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. Nuveen Minnesota Municipal
Performance |
| Timeline |
| Mfs Maryland Municipal |
| Nuveen Minnesota Mun |
Mfs Maryland and Nuveen Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Maryland and Nuveen Minnesota
The main advantage of trading using opposite Mfs Maryland and Nuveen Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Maryland position performs unexpectedly, Nuveen Minnesota 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 Nuveen Minnesota will offset losses from the drop in Nuveen Minnesota'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 |
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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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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