Correlation Between New York and Mfs Virginia
Can any of the company-specific risk be diversified away by investing in both New York and Mfs Virginia 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 New York and Mfs Virginia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New York Tax Free and Mfs Virginia Municipal, you can compare the effects of market volatilities on New York and Mfs Virginia 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 New York with a short position of Mfs Virginia. Check out your portfolio center. Please also check ongoing floating volatility patterns of New York and Mfs Virginia.
Diversification Opportunities for New York and Mfs Virginia
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Mfs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding New York Tax Free and Mfs Virginia Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Virginia Municipal and New York 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 New York Tax Free are associated (or correlated) with Mfs Virginia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Virginia Municipal has no effect on the direction of New York i.e., New York and Mfs Virginia go up and down completely randomly.
Pair Corralation between New York and Mfs Virginia
Assuming the 90 days horizon New York Tax Free is expected to generate 0.98 times more return on investment than Mfs Virginia. However, New York Tax Free is 1.02 times less risky than Mfs Virginia. It trades about 0.1 of its potential returns per unit of risk. Mfs Virginia Municipal is currently generating about 0.09 per unit of risk. If you would invest 1,003 in New York Tax Free on September 12, 2024 and sell it today you would earn a total of 98.00 from holding New York Tax Free or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New York Tax Free vs. Mfs Virginia Municipal
Performance |
| Timeline |
| New York Tax |
| Mfs Virginia Municipal |
New York and Mfs Virginia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New York and Mfs Virginia
The main advantage of trading using opposite New York and Mfs Virginia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New York position performs unexpectedly, Mfs Virginia 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 Virginia will offset losses from the drop in Mfs Virginia's long position.| New York vs. New Jersey Tax Free | New York vs. T Rowe Price | New York vs. Virginia Tax Free Bond | New York vs. T Rowe Price |
| Mfs Virginia vs. New Jersey Tax Free | Mfs Virginia vs. Maryland Tax Free Bond | Mfs Virginia vs. New York Tax Free | Mfs Virginia vs. Maryland Short Term Tax Free |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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