Correlation Between Blackrock Muniholdings and MFS Government
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniholdings and MFS Government 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 Muniholdings and MFS Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniholdings Quality and MFS Government Markets, you can compare the effects of market volatilities on Blackrock Muniholdings and MFS Government 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 Muniholdings with a short position of MFS Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniholdings and MFS Government.
Diversification Opportunities for Blackrock Muniholdings and MFS Government
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Blackrock and MFS is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniholdings Quality and MFS Government Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Government Markets and Blackrock Muniholdings 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 Muniholdings Quality are associated (or correlated) with MFS Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Government Markets has no effect on the direction of Blackrock Muniholdings i.e., Blackrock Muniholdings and MFS Government go up and down completely randomly.
Pair Corralation between Blackrock Muniholdings and MFS Government
Considering the 90-day investment horizon Blackrock Muniholdings Quality is expected to generate 1.0 times more return on investment than MFS Government. However, Blackrock Muniholdings is 1.0 times more volatile than MFS Government Markets. It trades about 0.36 of its potential returns per unit of risk. MFS Government Markets is currently generating about -0.18 per unit of risk. If you would invest 1,020 in Blackrock Muniholdings Quality on August 31, 2024 and sell it today you would earn a total of 51.00 from holding Blackrock Muniholdings Quality or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniholdings Quality vs. MFS Government Markets
Performance |
| Timeline |
| Blackrock Muniholdings |
| MFS Government Markets |
Blackrock Muniholdings and MFS Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniholdings and MFS Government
The main advantage of trading using opposite Blackrock Muniholdings and MFS Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniholdings position performs unexpectedly, MFS Government 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 Government will offset losses from the drop in MFS Government's long position.| Blackrock Muniholdings vs. John Hancock Income | Blackrock Muniholdings vs. MFS High Income | Blackrock Muniholdings vs. MFS Investment Grade | Blackrock Muniholdings vs. Blackrock Muniholdings Closed |
| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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