Correlation Between Nuveen Dividend and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Nuveen Dividend and MFS Investment 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 Nuveen Dividend and MFS Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Dividend Advantage and MFS Investment Grade, you can compare the effects of market volatilities on Nuveen Dividend and MFS Investment 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 Nuveen Dividend with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dividend and MFS Investment.
Diversification Opportunities for Nuveen Dividend and MFS Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and MFS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Advantage and MFS Investment Grade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Investment Grade and Nuveen Dividend 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 Nuveen Dividend Advantage are associated (or correlated) with MFS Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Investment Grade has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and MFS Investment go up and down completely randomly.
Pair Corralation between Nuveen Dividend and MFS Investment
Considering the 90-day investment horizon Nuveen Dividend Advantage is expected to generate 1.14 times more return on investment than MFS Investment. However, Nuveen Dividend is 1.14 times more volatile than MFS Investment Grade. It trades about 0.17 of its potential returns per unit of risk. MFS Investment Grade is currently generating about 0.18 per unit of risk. If you would invest 1,102 in Nuveen Dividend Advantage on September 2, 2024 and sell it today you would earn a total of 127.00 from holding Nuveen Dividend Advantage or generate 11.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Dividend Advantage vs. MFS Investment Grade
Performance |
| Timeline |
| Nuveen Dividend Advantage |
| MFS Investment Grade |
Nuveen Dividend and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Dividend and MFS Investment
The main advantage of trading using opposite Nuveen Dividend and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Dividend position performs unexpectedly, MFS Investment 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 Investment will offset losses from the drop in MFS Investment's long position.| Nuveen Dividend vs. Nuveen Amt Free | Nuveen Dividend vs. Nuveen Municipal Credit | Nuveen Dividend vs. Nuveen Municipal Value | Nuveen Dividend vs. Nuveen Municipal High |
| MFS Investment vs. Invesco High Income | MFS Investment vs. Eaton Vance National | MFS Investment vs. Nuveen California Select | MFS Investment vs. Federated Premier Municipal |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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