Correlation Between MFS Municipal and Blackrock Muniyield
Can any of the company-specific risk be diversified away by investing in both MFS Municipal and Blackrock Muniyield 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 Blackrock Muniyield 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 Blackrock Muniyield, you can compare the effects of market volatilities on MFS Municipal and Blackrock Muniyield 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 Blackrock Muniyield. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Municipal and Blackrock Muniyield.
Diversification Opportunities for MFS Municipal and Blackrock Muniyield
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MFS and BlackRock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding MFS Municipal Income and Blackrock Muniyield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Muniyield 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 Blackrock Muniyield. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Muniyield has no effect on the direction of MFS Municipal i.e., MFS Municipal and Blackrock Muniyield go up and down completely randomly.
Pair Corralation between MFS Municipal and Blackrock Muniyield
Considering the 90-day investment horizon MFS Municipal Income is expected to generate 0.95 times more return on investment than Blackrock Muniyield. However, MFS Municipal Income is 1.05 times less risky than Blackrock Muniyield. It trades about 0.22 of its potential returns per unit of risk. Blackrock Muniyield is currently generating about 0.14 per unit of risk. If you would invest 548.00 in MFS Municipal Income on August 29, 2024 and sell it today you would earn a total of 18.00 from holding MFS Municipal Income or generate 3.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Municipal Income vs. Blackrock Muniyield
Performance |
| Timeline |
| MFS Municipal Income |
| Blackrock Muniyield |
MFS Municipal and Blackrock Muniyield Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Municipal and Blackrock Muniyield
The main advantage of trading using opposite MFS Municipal and Blackrock Muniyield positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Municipal position performs unexpectedly, Blackrock Muniyield 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 Blackrock Muniyield will offset losses from the drop in Blackrock Muniyield'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 |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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