Correlation Between MFS Government and Nuveen Floating
Can any of the company-specific risk be diversified away by investing in both MFS Government and Nuveen Floating 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 Government and Nuveen Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Government Markets and Nuveen Floating Rate, you can compare the effects of market volatilities on MFS Government and Nuveen Floating 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 Government with a short position of Nuveen Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Government and Nuveen Floating.
Diversification Opportunities for MFS Government and Nuveen Floating
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MFS and Nuveen is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding MFS Government Markets and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate and MFS Government 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 Government Markets are associated (or correlated) with Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of MFS Government i.e., MFS Government and Nuveen Floating go up and down completely randomly.
Pair Corralation between MFS Government and Nuveen Floating
Considering the 90-day investment horizon MFS Government is expected to generate 1.62 times less return on investment than Nuveen Floating. But when comparing it to its historical volatility, MFS Government Markets is 1.03 times less risky than Nuveen Floating. It trades about 0.08 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 823.00 in Nuveen Floating Rate on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Nuveen Floating Rate or generate 10.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Government Markets vs. Nuveen Floating Rate
Performance |
| Timeline |
| MFS Government Markets |
| Nuveen Floating Rate |
MFS Government and Nuveen Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Government and Nuveen Floating
The main advantage of trading using opposite MFS Government and Nuveen Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Government position performs unexpectedly, Nuveen Floating 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 Nuveen Floating will offset losses from the drop in Nuveen Floating's long position.| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
| Nuveen Floating vs. Pioneer Floating Rate | Nuveen Floating vs. BlackRock Floating Rate | Nuveen Floating vs. Blackrock Muni Intermediate | Nuveen Floating vs. Eaton Vance Senior |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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