Correlation Between Mfs Virginia and Mfs California
Can any of the company-specific risk be diversified away by investing in both Mfs Virginia and Mfs California 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 Virginia and Mfs California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Virginia Municipal and Mfs California Municipal, you can compare the effects of market volatilities on Mfs Virginia and Mfs California 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 Virginia with a short position of Mfs California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Virginia and Mfs California.
Diversification Opportunities for Mfs Virginia and Mfs California
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Mfs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Virginia Municipal and Mfs California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs California Municipal and Mfs Virginia 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 Virginia Municipal are associated (or correlated) with Mfs California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs California Municipal has no effect on the direction of Mfs Virginia i.e., Mfs Virginia and Mfs California go up and down completely randomly.
Pair Corralation between Mfs Virginia and Mfs California
Assuming the 90 days horizon Mfs Virginia Municipal is expected to generate 0.98 times more return on investment than Mfs California. However, Mfs Virginia Municipal is 1.02 times less risky than Mfs California. It trades about 0.14 of its potential returns per unit of risk. Mfs California Municipal is currently generating about 0.11 per unit of risk. If you would invest 1,024 in Mfs Virginia Municipal on November 27, 2024 and sell it today you would earn a total of 7.00 from holding Mfs Virginia Municipal or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Virginia Municipal vs. Mfs California Municipal
Performance |
| Timeline |
| Mfs Virginia Municipal |
| Mfs California Municipal |
Mfs Virginia and Mfs California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Virginia and Mfs California
The main advantage of trading using opposite Mfs Virginia and Mfs California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Virginia position performs unexpectedly, Mfs California 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 California will offset losses from the drop in Mfs California's long position.| Mfs Virginia vs. Ishares Russell 2000 | Mfs Virginia vs. T Rowe Price | Mfs Virginia vs. Boston Partners Small | Mfs Virginia vs. Ashmore Emerging Markets |
| Mfs California vs. American Funds Retirement | Mfs California vs. Moderate Strategy Fund | Mfs California vs. Voya Target Retirement | Mfs California vs. Transamerica Cleartrack Retirement |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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