Correlation Between Mfs Municipal and Nuveen High
Can any of the company-specific risk be diversified away by investing in both Mfs Municipal and Nuveen High 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 Nuveen High 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 Nuveen High Yield, you can compare the effects of market volatilities on Mfs Municipal and Nuveen High 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 Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Municipal and Nuveen High.
Diversification Opportunities for Mfs Municipal and Nuveen High
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and Nuveen is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Municipal High and Nuveen High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Yield 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 Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Yield has no effect on the direction of Mfs Municipal i.e., Mfs Municipal and Nuveen High go up and down completely randomly.
Pair Corralation between Mfs Municipal and Nuveen High
Assuming the 90 days horizon Mfs Municipal High is expected to generate 0.76 times more return on investment than Nuveen High. However, Mfs Municipal High is 1.31 times less risky than Nuveen High. It trades about 0.2 of its potential returns per unit of risk. Nuveen High Yield is currently generating about 0.09 per unit of risk. If you would invest 715.00 in Mfs Municipal High on September 1, 2024 and sell it today you would earn a total of 49.00 from holding Mfs Municipal High or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Municipal High vs. Nuveen High Yield
Performance |
| Timeline |
| Mfs Municipal High |
| Nuveen High Yield |
Mfs Municipal and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Municipal and Nuveen High
The main advantage of trading using opposite Mfs Municipal and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Municipal position performs unexpectedly, Nuveen High 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 High will offset losses from the drop in Nuveen High's long position.| Mfs Municipal vs. Doubleline Emerging Markets | Mfs Municipal vs. Siit Emerging Markets | Mfs Municipal vs. Vanguard Developed Markets | Mfs Municipal vs. Origin Emerging Markets |
| Nuveen High vs. Oppenheimer Rochester High | Nuveen High vs. Oppenheimer Rochester Amt Free | Nuveen High vs. Nuveen All American Municipal | Nuveen High vs. Invesco High Yield |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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