Correlation Between Cref Money and Mfs Municipal
Can any of the company-specific risk be diversified away by investing in both Cref Money 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 Cref Money and Mfs Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Mfs Municipal Limited, you can compare the effects of market volatilities on Cref Money 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 Cref Money with a short position of Mfs Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Mfs Municipal.
Diversification Opportunities for Cref Money and Mfs Municipal
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Cref and Mfs is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market 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 Cref Money 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 Cref Money Market 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 Cref Money i.e., Cref Money and Mfs Municipal go up and down completely randomly.
Pair Corralation between Cref Money and Mfs Municipal
Assuming the 90 days trading horizon Cref Money Market is expected to generate 0.13 times more return on investment than Mfs Municipal. However, Cref Money Market is 7.48 times less risky than Mfs Municipal. It trades about 1.06 of its potential returns per unit of risk. Mfs Municipal Limited is currently generating about -0.02 per unit of risk. If you would invest 2,968 in Cref Money Market on October 22, 2024 and sell it today you would earn a total of 21.00 from holding Cref Money Market or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cref Money Market vs. Mfs Municipal Limited
Performance |
| Timeline |
| Cref Money Market |
| Mfs Municipal Limited |
Cref Money and Mfs Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Mfs Municipal
The main advantage of trading using opposite Cref Money and Mfs Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money 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.| Cref Money vs. Simt High Yield | Cref Money vs. Guggenheim High Yield | Cref Money vs. Strategic Advisers Income | Cref Money vs. Jpmorgan High Yield |
| Mfs Municipal vs. Cref Money Market | Mfs Municipal vs. Franklin Government Money | Mfs Municipal vs. Tiaa Cref Life Funds | Mfs Municipal vs. Fidelity Government Money |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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