Correlation Between Tax-exempt Fund and Mfs California
Can any of the company-specific risk be diversified away by investing in both Tax-exempt Fund and Mfs California 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 Tax-exempt Fund and Mfs California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tax Exempt Fund Of and Mfs California Municipal, you can compare the effects of market volatilities on Tax-exempt Fund and Mfs California 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 Tax-exempt Fund with a short position of Mfs California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tax-exempt Fund and Mfs California.
Diversification Opportunities for Tax-exempt Fund and Mfs California
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tax-exempt and Mfs is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Tax Exempt Fund Of and Mfs California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs California Municipal and Tax-exempt Fund 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 Tax Exempt Fund Of are associated (or correlated) with Mfs California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs California Municipal has no effect on the direction of Tax-exempt Fund i.e., Tax-exempt Fund and Mfs California go up and down completely randomly.
Pair Corralation between Tax-exempt Fund and Mfs California
Assuming the 90 days horizon Tax-exempt Fund is expected to generate 1.09 times less return on investment than Mfs California. But when comparing it to its historical volatility, Tax Exempt Fund Of is 1.15 times less risky than Mfs California. It trades about 0.09 of its potential returns per unit of risk. Mfs California Municipal is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 538.00 in Mfs California Municipal on September 2, 2024 and sell it today you would earn a total of 28.00 from holding Mfs California Municipal or generate 5.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tax Exempt Fund Of vs. Mfs California Municipal
Performance |
| Timeline |
| Tax Exempt Fund |
| Mfs California Municipal |
Tax-exempt Fund and Mfs California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tax-exempt Fund and Mfs California
The main advantage of trading using opposite Tax-exempt Fund and Mfs California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tax-exempt Fund position performs unexpectedly, Mfs California 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 California will offset losses from the drop in Mfs California's long position.| Tax-exempt Fund vs. Mesirow Financial Small | Tax-exempt Fund vs. Mesirow Financial Small | Tax-exempt Fund vs. Fidelity Advisor Financial | Tax-exempt Fund vs. Gabelli Global Financial |
| Mfs California vs. Mfs Prudent Investor | Mfs California vs. Mfs Prudent Investor | Mfs California vs. Mfs Prudent Investor | Mfs California vs. Mfs Prudent Investor |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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