Correlation Between NYSE Composite and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Mfs Municipal 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 NYSE Composite and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Mfs Municipal Limited, you can compare the effects of market volatilities on NYSE Composite and Mfs Municipal 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 NYSE Composite with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Mfs Municipal.
Diversification Opportunities for NYSE Composite and Mfs Municipal
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Mfs is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Mfs Municipal Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Municipal Limited and NYSE Composite 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 NYSE Composite are associated (or correlated) with Mfs Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Municipal Limited has no effect on the direction of NYSE Composite i.e., NYSE Composite and Mfs Municipal go up and down completely randomly.
Pair Corralation between NYSE Composite and Mfs Municipal
Assuming the 90 days trading horizon NYSE Composite is expected to under-perform the Mfs Municipal. In addition to that, NYSE Composite is 7.23 times more volatile than Mfs Municipal Limited. It trades about -0.06 of its total potential returns per unit of risk. Mfs Municipal Limited is currently generating about 0.36 per unit of volatility. If you would invest 799.00 in Mfs Municipal Limited on September 12, 2024 and sell it today you would earn a total of 4.00 from holding Mfs Municipal Limited or generate 0.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Mfs Municipal Limited
Performance |
| Timeline |
NYSE Composite and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Mfs Municipal Limited
Pair trading matchups for Mfs Municipal
Pair Trading with NYSE Composite and Mfs Municipal
The main advantage of trading using opposite NYSE Composite and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Mfs Municipal 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 Municipal will offset losses from the drop in Mfs Municipal's long position.| NYSE Composite vs. Teleflex Incorporated | NYSE Composite vs. Victorias Secret Co | NYSE Composite vs. Under Armour C | NYSE Composite vs. Steven Madden |
| Mfs Municipal vs. Blackrock Inflation Protected | Mfs Municipal vs. Federated Hermes Inflation | Mfs Municipal vs. Arrow Managed Futures | Mfs Municipal vs. Atac Inflation Rotation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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