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 New and MFS High Yield, 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
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Blackrock and MFS is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Blackrock Muniyield New and MFS High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Yield 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 New 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 Yield 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 1.41 times less return on investment than MFS High. But when comparing it to its historical volatility, Blackrock Muniyield New is 1.19 times less risky than MFS High. It trades about 0.06 of its potential returns per unit of risk. MFS High Yield is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 299.00 in MFS High Yield on September 1, 2024 and sell it today you would earn a total of 66.00 from holding MFS High Yield or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blackrock Muniyield New vs. MFS High Yield
Performance |
| Timeline |
| Blackrock Muniyield New |
| MFS High Yield |
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. Invesco High Income | Blackrock Muniyield vs. Eaton Vance National | Blackrock Muniyield vs. Federated Premier Municipal |
| MFS High vs. MFS Investment Grade | MFS High vs. MFS Municipal Income | MFS High vs. DTF Tax Free | MFS High vs. MFS Government Markets |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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