Correlation Between MFS Charter and MFS Municipal
Can any of the company-specific risk be diversified away by investing in both MFS Charter 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 MFS Charter and MFS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Charter Income and MFS Municipal Income, you can compare the effects of market volatilities on MFS Charter 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 MFS Charter with a short position of MFS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Charter and MFS Municipal.
Diversification Opportunities for MFS Charter and MFS Municipal
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MFS and MFS is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MFS Charter Income 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 MFS Charter 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 MFS Charter Income 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 MFS Charter i.e., MFS Charter and MFS Municipal go up and down completely randomly.
Pair Corralation between MFS Charter and MFS Municipal
Considering the 90-day investment horizon MFS Charter Income is expected to generate 0.59 times more return on investment than MFS Municipal. However, MFS Charter Income is 1.69 times less risky than MFS Municipal. It trades about 0.18 of its potential returns per unit of risk. MFS Municipal Income is currently generating about 0.0 per unit of risk. If you would invest 610.00 in MFS Charter Income on May 2, 2025 and sell it today you would earn a total of 23.00 from holding MFS Charter Income or generate 3.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
MFS Charter Income vs. MFS Municipal Income
Performance |
Timeline |
MFS Charter Income |
MFS Municipal Income |
MFS Charter and MFS Municipal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MFS Charter and MFS Municipal
The main advantage of trading using opposite MFS Charter and MFS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Charter 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.MFS Charter vs. MFS High Yield | MFS Charter vs. MFS High Income | MFS Charter vs. MFS Multimarket Income | MFS Charter vs. MFS Intermediate Income |
MFS Municipal vs. MFS Investment Grade | MFS Municipal vs. Eaton Vance National | MFS Municipal vs. Blackrock Munivest | MFS Municipal vs. DTF 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Global Correlations Find global opportunities by holding instruments from different markets |