Correlation Between Mfs Municipal and Bbh Intermediate
Can any of the company-specific risk be diversified away by investing in both Mfs Municipal and Bbh Intermediate 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 Bbh Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Municipal High and Bbh Intermediate Municipal, you can compare the effects of market volatilities on Mfs Municipal and Bbh Intermediate 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 Bbh Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Municipal and Bbh Intermediate.
Diversification Opportunities for Mfs Municipal and Bbh Intermediate
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Bbh is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Municipal High and Bbh Intermediate Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bbh Intermediate Mun 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 High are associated (or correlated) with Bbh Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bbh Intermediate Mun has no effect on the direction of Mfs Municipal i.e., Mfs Municipal and Bbh Intermediate go up and down completely randomly.
Pair Corralation between Mfs Municipal and Bbh Intermediate
Assuming the 90 days horizon Mfs Municipal High is expected to generate 1.64 times more return on investment than Bbh Intermediate. However, Mfs Municipal is 1.64 times more volatile than Bbh Intermediate Municipal. It trades about 0.07 of its potential returns per unit of risk. Bbh Intermediate Municipal is currently generating about 0.09 per unit of risk. If you would invest 690.00 in Mfs Municipal High on September 3, 2024 and sell it today you would earn a total of 75.00 from holding Mfs Municipal High or generate 10.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Municipal High vs. Bbh Intermediate Municipal
Performance |
| Timeline |
| Mfs Municipal High |
| Bbh Intermediate Mun |
Mfs Municipal and Bbh Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Municipal and Bbh Intermediate
The main advantage of trading using opposite Mfs Municipal and Bbh Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Municipal position performs unexpectedly, Bbh Intermediate 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 Bbh Intermediate will offset losses from the drop in Bbh Intermediate's long position.| Mfs Municipal vs. Ab Bond Inflation | Mfs Municipal vs. T Rowe Price | Mfs Municipal vs. Guidepath Managed Futures | Mfs Municipal vs. Oklahoma College Savings |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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