Correlation Between RiverNorth Flexible and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both RiverNorth Flexible 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 RiverNorth Flexible and MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RiverNorth Flexible Municipalome and MFS Municipal Income, you can compare the effects of market volatilities on RiverNorth Flexible 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 RiverNorth Flexible with a short position of MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of RiverNorth Flexible and MFS Municipal.
Diversification Opportunities for RiverNorth Flexible and MFS Municipal
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RiverNorth and MFS is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding RiverNorth Flexible Municipalo and MFS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Municipal Income and RiverNorth Flexible 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 RiverNorth Flexible Municipalome 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 Income has no effect on the direction of RiverNorth Flexible i.e., RiverNorth Flexible and MFS Municipal go up and down completely randomly.
Pair Corralation between RiverNorth Flexible and MFS Municipal
Given the investment horizon of 90 days RiverNorth Flexible Municipalome is expected to generate 1.01 times more return on investment than MFS Municipal. However, RiverNorth Flexible is 1.01 times more volatile than MFS Municipal Income. It trades about -0.07 of its potential returns per unit of risk. MFS Municipal Income is currently generating about -0.09 per unit of risk. If you would invest 1,427 in RiverNorth Flexible Municipalome on August 26, 2024 and sell it today you would lose (29.00) from holding RiverNorth Flexible Municipalome or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RiverNorth Flexible Municipalo vs. MFS Municipal Income
Performance |
| Timeline |
| RiverNorth Flexible |
| MFS Municipal Income |
RiverNorth Flexible and MFS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RiverNorth Flexible and MFS Municipal
The main advantage of trading using opposite RiverNorth Flexible and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RiverNorth Flexible 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.| RiverNorth Flexible vs. RiverNorth Flexible Municipalome | RiverNorth Flexible vs. Blackrock Muniholdings Ny | RiverNorth Flexible vs. MFS Investment Grade | RiverNorth Flexible vs. Munivest Fund |
| MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Invesco High Income | MFS Municipal vs. Blackrock Muniholdings Ny | MFS Municipal vs. Nuveen California Select |
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.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |