Correlation Between Nuveen Municipal and MFS Investment
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipal 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 Municipal 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 Municipal Credit and MFS Investment Grade, you can compare the effects of market volatilities on Nuveen Municipal 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 Municipal with a short position of MFS Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipal and MFS Investment.
Diversification Opportunities for Nuveen Municipal and MFS Investment
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and MFS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipal Credit 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 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 Nuveen Municipal Credit 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 Municipal i.e., Nuveen Municipal and MFS Investment go up and down completely randomly.
Pair Corralation between Nuveen Municipal and MFS Investment
Considering the 90-day investment horizon Nuveen Municipal is expected to generate 1.49 times less return on investment than MFS Investment. In addition to that, Nuveen Municipal is 1.42 times more volatile than MFS Investment Grade. It trades about 0.2 of its total potential returns per unit of risk. MFS Investment Grade is currently generating about 0.42 per unit of volatility. If you would invest 804.00 in MFS Investment Grade on September 14, 2024 and sell it today you would earn a total of 29.00 from holding MFS Investment Grade or generate 3.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipal Credit vs. MFS Investment Grade
Performance |
| Timeline |
| Nuveen Municipal Credit |
| MFS Investment Grade |
Nuveen Municipal and MFS Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipal and MFS Investment
The main advantage of trading using opposite Nuveen Municipal and MFS Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipal 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 Municipal vs. MFS Investment Grade | Nuveen Municipal vs. Eaton Vance Municipal | Nuveen Municipal vs. DTF Tax Free | Nuveen Municipal vs. Aquagold International |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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