Correlation Between Barings Corporate and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both Barings Corporate 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 Barings Corporate and MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barings Corporate Investors and MFS Municipal Income, you can compare the effects of market volatilities on Barings Corporate 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 Barings Corporate with a short position of MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barings Corporate and MFS Municipal.
Diversification Opportunities for Barings Corporate and MFS Municipal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Barings and MFS is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Barings Corporate Investors and MFS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Municipal Income and Barings Corporate 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 Barings Corporate Investors 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 Income has no effect on the direction of Barings Corporate i.e., Barings Corporate and MFS Municipal go up and down completely randomly.
Pair Corralation between Barings Corporate and MFS Municipal
Considering the 90-day investment horizon Barings Corporate is expected to generate 1.11 times less return on investment than MFS Municipal. In addition to that, Barings Corporate is 2.03 times more volatile than MFS Municipal Income. It trades about 0.1 of its total potential returns per unit of risk. MFS Municipal Income is currently generating about 0.23 per unit of volatility. If you would invest 547.00 in MFS Municipal Income on August 30, 2024 and sell it today you would earn a total of 19.00 from holding MFS Municipal Income or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Barings Corporate Investors vs. MFS Municipal Income
Performance |
| Timeline |
| Barings Corporate |
| MFS Municipal Income |
Barings Corporate and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barings Corporate and MFS Municipal
The main advantage of trading using opposite Barings Corporate and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barings Corporate 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.| Barings Corporate vs. Eaton Vance National | Barings Corporate vs. John Hancock Investors | Barings Corporate vs. MFS Municipal Income | Barings Corporate vs. RiverNorth Flexible Municipalome |
| MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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