Correlation Between Mfs Municipal and Dreyfus Strategic
Can any of the company-specific risk be diversified away by investing in both Mfs Municipal and Dreyfus Strategic 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 Municipal and Dreyfus Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Municipal Income and Dreyfus Strategic Municipal, you can compare the effects of market volatilities on Mfs Municipal and Dreyfus Strategic 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 Municipal with a short position of Dreyfus Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Municipal and Dreyfus Strategic.
Diversification Opportunities for Mfs Municipal and Dreyfus Strategic
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Dreyfus is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Municipal Income and Dreyfus Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Strategic and Mfs Municipal 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 Municipal Income are associated (or correlated) with Dreyfus Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Strategic has no effect on the direction of Mfs Municipal i.e., Mfs Municipal and Dreyfus Strategic go up and down completely randomly.
Pair Corralation between Mfs Municipal and Dreyfus Strategic
Assuming the 90 days horizon Mfs Municipal Income is expected to generate 0.85 times more return on investment than Dreyfus Strategic. However, Mfs Municipal Income is 1.18 times less risky than Dreyfus Strategic. It trades about -0.1 of its potential returns per unit of risk. Dreyfus Strategic Municipal is currently generating about -0.14 per unit of risk. If you would invest 610.00 in Mfs Municipal Income on December 28, 2024 and sell it today you would lose (14.00) from holding Mfs Municipal Income or give up 2.3% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs Municipal Income vs. Dreyfus Strategic Municipal
Performance |
Timeline |
Mfs Municipal Income |
Dreyfus Strategic |
Mfs Municipal and Dreyfus Strategic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs Municipal and Dreyfus Strategic
The main advantage of trading using opposite Mfs Municipal and Dreyfus Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Municipal position performs unexpectedly, Dreyfus Strategic 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 Dreyfus Strategic will offset losses from the drop in Dreyfus Strategic's long position.Mfs Municipal vs. Ftfa Franklin Templeton Growth | Mfs Municipal vs. Eip Growth And | Mfs Municipal vs. Nuveen Santa Barbara | Mfs Municipal vs. Qs Moderate Growth |
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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