Correlation Between MFS Municipal and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both MFS Municipal and Eaton Vance 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 Municipal and Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Municipal Income and Eaton Vance National, you can compare the effects of market volatilities on MFS Municipal and Eaton Vance 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 Municipal with a short position of Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Municipal and Eaton Vance.
Diversification Opportunities for MFS Municipal and Eaton Vance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Eaton is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MFS Municipal Income and Eaton Vance National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance National and MFS Municipal 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 Municipal Income are associated (or correlated) with Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance National has no effect on the direction of MFS Municipal i.e., MFS Municipal and Eaton Vance go up and down completely randomly.
Pair Corralation between MFS Municipal and Eaton Vance
Considering the 90-day investment horizon MFS Municipal Income is expected to generate 1.36 times more return on investment than Eaton Vance. However, MFS Municipal is 1.36 times more volatile than Eaton Vance National. It trades about 0.11 of its potential returns per unit of risk. Eaton Vance National is currently generating about -0.21 per unit of risk. If you would invest 548.00 in MFS Municipal Income on August 27, 2024 and sell it today you would earn a total of 8.00 from holding MFS Municipal Income or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Municipal Income vs. Eaton Vance National
Performance |
| Timeline |
| MFS Municipal Income |
| Eaton Vance National |
MFS Municipal and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Municipal and Eaton Vance
The main advantage of trading using opposite MFS Municipal and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Municipal position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.| MFS Municipal vs. PowerUp Acquisition Corp | MFS Municipal vs. Aurora Innovation | MFS Municipal vs. HUMANA INC | MFS Municipal vs. Aquagold International |
| Eaton Vance vs. PowerUp Acquisition Corp | Eaton Vance vs. Aurora Innovation | Eaton Vance vs. HUMANA INC | Eaton Vance vs. Aquagold International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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