Correlation Between Blackrock Muniyield and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and MFS Investment 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 Blackrock Muniyield and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniyield Quality and MFS Investment Grade, you can compare the effects of market volatilities on Blackrock Muniyield and MFS Investment 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 Blackrock Muniyield with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and MFS Investment.
Diversification Opportunities for Blackrock Muniyield and MFS Investment
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Blackrock and MFS is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield Quality and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade and Blackrock Muniyield 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 Blackrock Muniyield Quality are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and MFS Investment go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and MFS Investment
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 1.42 times less return on investment than MFS Investment. But when comparing it to its historical volatility, Blackrock Muniyield Quality is 1.09 times less risky than MFS Investment. It trades about 0.09 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 803.00 in MFS Investment Grade on August 28, 2024 and sell it today you would earn a total of 10.00 from holding MFS Investment Grade or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield Quality vs. MFS Investment Grade
Performance |
| Timeline |
| Blackrock Muniyield |
| MFS Investment Grade |
Blackrock Muniyield and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and MFS Investment
The main advantage of trading using opposite Blackrock Muniyield and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, MFS Investment 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 MFS Investment will offset losses from the drop in MFS Investment's long position.| Blackrock Muniyield vs. John Hancock Income | Blackrock Muniyield vs. MFS High Income | Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Blackrock Muniholdings Closed |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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