Correlation Between Nasdaq-100(r) and Mfs Maryland
Can any of the company-specific risk be diversified away by investing in both Nasdaq-100(r) and Mfs Maryland 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 Nasdaq-100(r) and Mfs Maryland into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 2x Strategy and Mfs Maryland Municipal, you can compare the effects of market volatilities on Nasdaq-100(r) and Mfs Maryland 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 Nasdaq-100(r) with a short position of Mfs Maryland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq-100(r) and Mfs Maryland.
Diversification Opportunities for Nasdaq-100(r) and Mfs Maryland
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nasdaq-100(r) and Mfs is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 2x Strategy and Mfs Maryland Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Maryland Municipal and Nasdaq-100(r) 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 Nasdaq 100 2x Strategy are associated (or correlated) with Mfs Maryland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Maryland Municipal has no effect on the direction of Nasdaq-100(r) i.e., Nasdaq-100(r) and Mfs Maryland go up and down completely randomly.
Pair Corralation between Nasdaq-100(r) and Mfs Maryland
Assuming the 90 days horizon Nasdaq 100 2x Strategy is expected to generate 6.14 times more return on investment than Mfs Maryland. However, Nasdaq-100(r) is 6.14 times more volatile than Mfs Maryland Municipal. It trades about 0.2 of its potential returns per unit of risk. Mfs Maryland Municipal is currently generating about 0.2 per unit of risk. If you would invest 52,748 in Nasdaq 100 2x Strategy on September 1, 2024 and sell it today you would earn a total of 4,302 from holding Nasdaq 100 2x Strategy or generate 8.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 2x Strategy vs. Mfs Maryland Municipal
Performance |
| Timeline |
| Nasdaq 100 2x |
| Mfs Maryland Municipal |
Nasdaq-100(r) and Mfs Maryland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq-100(r) and Mfs Maryland
The main advantage of trading using opposite Nasdaq-100(r) and Mfs Maryland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq-100(r) position performs unexpectedly, Mfs Maryland 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 Maryland will offset losses from the drop in Mfs Maryland's long position.| Nasdaq-100(r) vs. Sp 500 2x | Nasdaq-100(r) vs. Inverse Nasdaq 100 2x | Nasdaq-100(r) vs. Inverse Sp 500 | Nasdaq-100(r) vs. Ultra Nasdaq 100 Profunds |
| Mfs Maryland vs. Nuveen Minnesota Municipal | Mfs Maryland vs. Gamco Global Telecommunications | Mfs Maryland vs. Morningstar Municipal Bond | Mfs Maryland vs. T Rowe Price |
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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