Correlation Between Nuveen Municipalome and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipalome 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 Municipalome 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 Municipalome and MFS Investment Grade, you can compare the effects of market volatilities on Nuveen Municipalome 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 Municipalome with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipalome and MFS Investment.
Diversification Opportunities for Nuveen Municipalome and MFS Investment
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nuveen and MFS is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipalome 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 Municipalome 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 Municipalome 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 Municipalome i.e., Nuveen Municipalome and MFS Investment go up and down completely randomly.
Pair Corralation between Nuveen Municipalome and MFS Investment
Considering the 90-day investment horizon Nuveen Municipalome is expected to under-perform the MFS Investment. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen Municipalome is 1.25 times less risky than MFS Investment. The fund trades about -0.1 of its potential returns per unit of risk. The MFS Investment Grade is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 803.00 in MFS Investment Grade on August 29, 2024 and sell it today you would earn a total of 8.00 from holding MFS Investment Grade or generate 1.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipalome vs. MFS Investment Grade
Performance |
| Timeline |
| Nuveen Municipalome |
| MFS Investment Grade |
Nuveen Municipalome and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipalome and MFS Investment
The main advantage of trading using opposite Nuveen Municipalome and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipalome 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 Municipalome vs. DTF Tax Free | Nuveen Municipalome vs. MFS High Yield | Nuveen Municipalome vs. MFS High Income | Nuveen Municipalome vs. John Hancock Income |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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