Correlation Between Blackrock Muniyield and MFS High
Can any of the company-specific risk be diversified away by investing in both Blackrock Muniyield and MFS High 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 High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blackrock Muniyield and MFS High Income, you can compare the effects of market volatilities on Blackrock Muniyield and MFS High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blackrock Muniyield and MFS High.
Diversification Opportunities for Blackrock Muniyield and MFS High
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Blackrock and MFS is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income 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 are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of Blackrock Muniyield i.e., Blackrock Muniyield and MFS High go up and down completely randomly.
Pair Corralation between Blackrock Muniyield and MFS High
Considering the 90-day investment horizon Blackrock Muniyield is expected to generate 0.89 times more return on investment than MFS High. However, Blackrock Muniyield is 1.13 times less risky than MFS High. It trades about 0.15 of its potential returns per unit of risk. MFS High Income is currently generating about 0.13 per unit of risk. If you would invest 1,028 in Blackrock Muniyield on September 1, 2024 and sell it today you would earn a total of 116.00 from holding Blackrock Muniyield or generate 11.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield vs. MFS High Income
Performance |
| Timeline |
| Blackrock Muniyield |
| MFS High Income |
Blackrock Muniyield and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blackrock Muniyield and MFS High
The main advantage of trading using opposite Blackrock Muniyield and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blackrock Muniyield position performs unexpectedly, MFS High 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 High will offset losses from the drop in MFS High's long position.| Blackrock Muniyield vs. MFS Investment Grade | Blackrock Muniyield vs. Eaton Vance Municipal | Blackrock Muniyield vs. DTF Tax Free | Blackrock Muniyield vs. Aquagold International |
| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Invesco High Income | MFS High vs. Blackrock Muniholdings Ny |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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