Correlation Between Mfs Municipal and Hennessy
Can any of the company-specific risk be diversified away by investing in both Mfs Municipal and Hennessy 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 Hennessy 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 Hennessy Bp Energy, you can compare the effects of market volatilities on Mfs Municipal and Hennessy 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 Hennessy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Municipal and Hennessy.
Diversification Opportunities for Mfs Municipal and Hennessy
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Mfs and Hennessy is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Municipal High and Hennessy Bp Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Bp Energy 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 Hennessy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Bp Energy has no effect on the direction of Mfs Municipal i.e., Mfs Municipal and Hennessy go up and down completely randomly.
Pair Corralation between Mfs Municipal and Hennessy
Assuming the 90 days horizon Mfs Municipal is expected to generate 42.59 times less return on investment than Hennessy. But when comparing it to its historical volatility, Mfs Municipal High is 2.45 times less risky than Hennessy. It trades about 0.06 of its potential returns per unit of risk. Hennessy Bp Energy is currently generating about 1.06 of returns per unit of risk over similar time horizon. If you would invest 2,620 in Hennessy Bp Energy on October 24, 2024 and sell it today you would earn a total of 304.00 from holding Hennessy Bp Energy or generate 11.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Mfs Municipal High vs. Hennessy Bp Energy
Performance |
| Timeline |
| Mfs Municipal High |
| Hennessy Bp Energy |
Mfs Municipal and Hennessy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Municipal and Hennessy
The main advantage of trading using opposite Mfs Municipal and Hennessy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Municipal position performs unexpectedly, Hennessy 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 Hennessy will offset losses from the drop in Hennessy's long position.| Mfs Municipal vs. Hennessy Bp Energy | Mfs Municipal vs. Blackrock All Cap Energy | Mfs Municipal vs. Vanguard Energy Index | Mfs Municipal vs. World Energy Fund |
| Hennessy vs. World Energy Fund | Hennessy vs. Ivy Energy Fund | Hennessy vs. Blackrock All Cap Energy | Hennessy vs. Energy Fund Class |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |