Correlation Between Mfs Maryland and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Mfs Maryland and Mfs Emerging 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 Mfs Emerging 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 Mfs Emerging Markets, you can compare the effects of market volatilities on Mfs Maryland and Mfs Emerging 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 Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Maryland and Mfs Emerging.
Diversification Opportunities for Mfs Maryland and Mfs Emerging
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Maryland Municipal and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets 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 Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Mfs Maryland i.e., Mfs Maryland and Mfs Emerging go up and down completely randomly.
Pair Corralation between Mfs Maryland and Mfs Emerging
Assuming the 90 days horizon Mfs Maryland Municipal is expected to generate 1.11 times more return on investment than Mfs Emerging. However, Mfs Maryland is 1.11 times more volatile than Mfs Emerging Markets. It trades about 0.15 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.08 per unit of risk. If you would invest 1,002 in Mfs Maryland Municipal on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Mfs Maryland Municipal or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Maryland Municipal vs. Mfs Emerging Markets
Performance |
| Timeline |
| Mfs Maryland Municipal |
| Mfs Emerging Markets |
Mfs Maryland and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Maryland and Mfs Emerging
The main advantage of trading using opposite Mfs Maryland and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Maryland position performs unexpectedly, Mfs Emerging 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 Emerging will offset losses from the drop in Mfs Emerging's long position.| Mfs Maryland vs. Bbh Intermediate Municipal | Mfs Maryland vs. Nebraska Municipal Fund | Mfs Maryland vs. Multisector Bond Sma | Mfs Maryland vs. Financial Industries Fund |
| Mfs Emerging vs. Qs Large Cap | Mfs Emerging vs. Rbc Microcap Value | Mfs Emerging vs. Western Asset Municipal | Mfs Emerging vs. Scharf Global Opportunity |
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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