Correlation Between Nuveen New and MFS High
Can any of the company-specific risk be diversified away by investing in both Nuveen New 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 Nuveen New and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen New York and MFS High Yield, you can compare the effects of market volatilities on Nuveen New 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 Nuveen New with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and MFS High.
Diversification Opportunities for Nuveen New and MFS High
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and MFS is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York 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 Nuveen New 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 New York 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 Nuveen New i.e., Nuveen New and MFS High go up and down completely randomly.
Pair Corralation between Nuveen New and MFS High
Considering the 90-day investment horizon Nuveen New York is expected to under-perform the MFS High. But the stock apears to be less risky and, when comparing its historical volatility, Nuveen New York is 2.27 times less risky than MFS High. The stock trades about -0.09 of its potential returns per unit of risk. The MFS High Yield is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 357.00 in MFS High Yield on September 1, 2024 and sell it today you would earn a total of 8.00 from holding MFS High Yield or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen New York vs. MFS High Yield
Performance |
| Timeline |
| Nuveen New York |
| MFS High Yield |
Nuveen New and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen New and MFS High
The main advantage of trading using opposite Nuveen New and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New 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.| Nuveen New vs. Western Asset Municipal | Nuveen New vs. Nuveen Massachusetts Quality | Nuveen New vs. Fiera Capital | Nuveen New vs. European Equity Closed |
| 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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