Correlation Between Nebraska Municipal and Mfs Maryland
Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal and Mfs Maryland 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 Nebraska Municipal and Mfs Maryland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nebraska Municipal Fund and Mfs Maryland Municipal, you can compare the effects of market volatilities on Nebraska Municipal and Mfs Maryland 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 Nebraska Municipal with a short position of Mfs Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Mfs Maryland.
Diversification Opportunities for Nebraska Municipal and Mfs Maryland
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NEBRASKA and Mfs is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Mfs Maryland Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Maryland Municipal and Nebraska Municipal 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 Nebraska Municipal Fund are associated (or correlated) with Mfs Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Maryland Municipal has no effect on the direction of Nebraska Municipal i.e., Nebraska Municipal and Mfs Maryland go up and down completely randomly.
Pair Corralation between Nebraska Municipal and Mfs Maryland
Assuming the 90 days horizon Nebraska Municipal is expected to generate 1.48 times less return on investment than Mfs Maryland. But when comparing it to its historical volatility, Nebraska Municipal Fund is 1.07 times less risky than Mfs Maryland. It trades about 0.06 of its potential returns per unit of risk. Mfs Maryland Municipal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 948.00 in Mfs Maryland Municipal on August 29, 2024 and sell it today you would earn a total of 65.00 from holding Mfs Maryland Municipal or generate 6.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nebraska Municipal Fund vs. Mfs Maryland Municipal
Performance |
| Timeline |
| Nebraska Municipal |
| Mfs Maryland Municipal |
Nebraska Municipal and Mfs Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nebraska Municipal and Mfs Maryland
The main advantage of trading using opposite Nebraska Municipal and Mfs Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal position performs unexpectedly, Mfs Maryland 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 Maryland will offset losses from the drop in Mfs Maryland's long position.| Nebraska Municipal vs. Virginia Bond Fund | Nebraska Municipal vs. HUMANA INC | Nebraska Municipal vs. Aquagold International | Nebraska Municipal vs. Barloworld Ltd ADR |
| Mfs Maryland vs. Bbh Intermediate Municipal | Mfs Maryland vs. Nebraska Municipal Fund | Mfs Maryland vs. Multisector Bond Sma | Mfs Maryland vs. Financial Industries Fund |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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