Correlation Between Mfs Utilities and Georgia Tax-free
Can any of the company-specific risk be diversified away by investing in both Mfs Utilities and Georgia Tax-free 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 Utilities and Georgia Tax-free into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Utilities Fund and Georgia Tax Free Bond, you can compare the effects of market volatilities on Mfs Utilities and Georgia Tax-free 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 Utilities with a short position of Georgia Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Utilities and Georgia Tax-free.
Diversification Opportunities for Mfs Utilities and Georgia Tax-free
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Georgia is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Utilities Fund and Georgia Tax Free Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Georgia Tax Free and Mfs Utilities 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 Utilities Fund are associated (or correlated) with Georgia Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Georgia Tax Free has no effect on the direction of Mfs Utilities i.e., Mfs Utilities and Georgia Tax-free go up and down completely randomly.
Pair Corralation between Mfs Utilities and Georgia Tax-free
Assuming the 90 days horizon Mfs Utilities is expected to generate 1.64 times less return on investment than Georgia Tax-free. In addition to that, Mfs Utilities is 2.7 times more volatile than Georgia Tax Free Bond. It trades about 0.02 of its total potential returns per unit of risk. Georgia Tax Free Bond is currently generating about 0.1 per unit of volatility. If you would invest 1,089 in Georgia Tax Free Bond on August 26, 2024 and sell it today you would earn a total of 9.00 from holding Georgia Tax Free Bond or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Utilities Fund vs. Georgia Tax Free Bond
Performance |
| Timeline |
| Mfs Utilities |
| Georgia Tax Free |
Mfs Utilities and Georgia Tax-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Utilities and Georgia Tax-free
The main advantage of trading using opposite Mfs Utilities and Georgia Tax-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Utilities position performs unexpectedly, Georgia Tax-free 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 Georgia Tax-free will offset losses from the drop in Georgia Tax-free's long position.| Mfs Utilities vs. Georgia Tax Free Bond | Mfs Utilities vs. Artisan High Income | Mfs Utilities vs. Franklin High Yield | Mfs Utilities vs. Bbh Intermediate Municipal |
| Georgia Tax-free vs. New Jersey Tax Free | Georgia Tax-free vs. Maryland Tax Free Bond | Georgia Tax-free vs. New York Tax Free | Georgia Tax-free vs. Virginia Tax Free Bond |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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