Correlation Between Mfs Maryland and Morningstar Municipal
Can any of the company-specific risk be diversified away by investing in both Mfs Maryland and Morningstar 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 Morningstar 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 Morningstar Municipal Bond, you can compare the effects of market volatilities on Mfs Maryland and Morningstar 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 Morningstar Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Maryland and Morningstar Municipal.
Diversification Opportunities for Mfs Maryland and Morningstar Municipal
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Morningstar is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Maryland Municipal and Morningstar Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morningstar Municipal 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 Morningstar Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morningstar Municipal has no effect on the direction of Mfs Maryland i.e., Mfs Maryland and Morningstar Municipal go up and down completely randomly.
Pair Corralation between Mfs Maryland and Morningstar Municipal
Assuming the 90 days horizon Mfs Maryland Municipal is expected to generate 1.28 times more return on investment than Morningstar Municipal. However, Mfs Maryland is 1.28 times more volatile than Morningstar Municipal Bond. It trades about 0.2 of its potential returns per unit of risk. Morningstar Municipal Bond is currently generating about 0.19 per unit of risk. If you would invest 1,003 in Mfs Maryland Municipal on September 1, 2024 and sell it today you would earn a total of 14.00 from holding Mfs Maryland Municipal or generate 1.4% 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. Morningstar Municipal Bond
Performance |
| Timeline |
| Mfs Maryland Municipal |
| Morningstar Municipal |
Mfs Maryland and Morningstar Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Maryland and Morningstar Municipal
The main advantage of trading using opposite Mfs Maryland and Morningstar Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Maryland position performs unexpectedly, Morningstar 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 Morningstar Municipal will offset losses from the drop in Morningstar 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 |
| Morningstar Municipal vs. Dws Government Money | Morningstar Municipal vs. Virtus Seix Government | Morningstar Municipal vs. Ab Government Exchange | Morningstar Municipal vs. Franklin Adjustable Government |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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