Correlation Between MFS Municipal and Clough Global
Can any of the company-specific risk be diversified away by investing in both MFS Municipal and Clough Global 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 Clough Global 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 Clough Global Ef, you can compare the effects of market volatilities on MFS Municipal and Clough Global 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 Clough Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Municipal and Clough Global.
Diversification Opportunities for MFS Municipal and Clough Global
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MFS and Clough is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MFS Municipal Income and Clough Global Ef in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Ef 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 Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Ef has no effect on the direction of MFS Municipal i.e., MFS Municipal and Clough Global go up and down completely randomly.
Pair Corralation between MFS Municipal and Clough Global
Considering the 90-day investment horizon MFS Municipal is expected to generate 1.15 times less return on investment than Clough Global. But when comparing it to its historical volatility, MFS Municipal Income is 1.05 times less risky than Clough Global. It trades about 0.04 of its potential returns per unit of risk. Clough Global Ef is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Clough Global Ef on September 2, 2024 and sell it today you would earn a total of 122.00 from holding Clough Global Ef or generate 21.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Municipal Income vs. Clough Global Ef
Performance |
| Timeline |
| MFS Municipal Income |
| Clough Global Ef |
MFS Municipal and Clough Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Municipal and Clough Global
The main advantage of trading using opposite MFS Municipal and Clough Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Municipal position performs unexpectedly, Clough Global 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 Clough Global will offset losses from the drop in Clough Global's long position.| MFS Municipal vs. Visa Class A | MFS Municipal vs. Diamond Hill Investment | MFS Municipal vs. Distoken Acquisition | MFS Municipal vs. Associated Capital Group |
| Clough Global vs. Allianzgi Convertible Income | Clough Global vs. MFS Investment Grade | Clough Global vs. Eaton Vance Senior | Clough Global vs. Stone Harbor Emerging |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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