Correlation Between MFS Municipal and Barings Corporate
Can any of the company-specific risk be diversified away by investing in both MFS Municipal and Barings Corporate 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 Barings Corporate 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 Barings Corporate Investors, you can compare the effects of market volatilities on MFS Municipal and Barings Corporate 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 Barings Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Municipal and Barings Corporate.
Diversification Opportunities for MFS Municipal and Barings Corporate
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MFS and Barings is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding MFS Municipal Income and Barings Corporate Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barings Corporate 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 Barings Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barings Corporate has no effect on the direction of MFS Municipal i.e., MFS Municipal and Barings Corporate go up and down completely randomly.
Pair Corralation between MFS Municipal and Barings Corporate
Considering the 90-day investment horizon MFS Municipal Income is expected to under-perform the Barings Corporate. But the stock apears to be less risky and, when comparing its historical volatility, MFS Municipal Income is 2.34 times less risky than Barings Corporate. The stock trades about -0.09 of its potential returns per unit of risk. The Barings Corporate Investors is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,899 in Barings Corporate Investors on August 26, 2024 and sell it today you would earn a total of 43.00 from holding Barings Corporate Investors or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Municipal Income vs. Barings Corporate Investors
Performance |
| Timeline |
| MFS Municipal Income |
| Barings Corporate |
MFS Municipal and Barings Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Municipal and Barings Corporate
The main advantage of trading using opposite MFS Municipal and Barings Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Municipal position performs unexpectedly, Barings Corporate 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 Barings Corporate will offset losses from the drop in Barings Corporate's long position.| MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
| Barings Corporate vs. Eaton Vance National | Barings Corporate vs. John Hancock Investors | Barings Corporate vs. MFS Municipal Income | Barings Corporate vs. RiverNorth Flexible Municipalome |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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