Correlation Between Mfs Total and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Mfs Total and Ab Municipal 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 Total and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Total Return and Ab Municipal Bond, you can compare the effects of market volatilities on Mfs Total and Ab Municipal 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 Total with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Total and Ab Municipal.
Diversification Opportunities for Mfs Total and Ab Municipal
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and AUNTX is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Total Return and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Mfs Total 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 Total Return are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Mfs Total i.e., Mfs Total and Ab Municipal go up and down completely randomly.
Pair Corralation between Mfs Total and Ab Municipal
Assuming the 90 days horizon Mfs Total Return is expected to under-perform the Ab Municipal. In addition to that, Mfs Total is 1.7 times more volatile than Ab Municipal Bond. It trades about -0.04 of its total potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.07 per unit of volatility. If you would invest 1,057 in Ab Municipal Bond on November 3, 2024 and sell it today you would earn a total of 15.00 from holding Ab Municipal Bond or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Total Return vs. Ab Municipal Bond
Performance |
| Timeline |
| Mfs Total Return |
| Ab Municipal Bond |
Mfs Total and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Total and Ab Municipal
The main advantage of trading using opposite Mfs Total and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Total position performs unexpectedly, Ab Municipal 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Mfs Total vs. Aamhimco Short Duration | Mfs Total vs. Nuveen Short Term | Mfs Total vs. Leader Short Term Bond | Mfs Total vs. Blackrock Global Longshort |
| Ab Municipal vs. Multisector Bond Sma | Ab Municipal vs. Artisan High Income | Ab Municipal vs. Barings High Yield | Ab Municipal vs. Ab Bond Inflation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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