Correlation Between DTF Tax and MFS High
Can any of the company-specific risk be diversified away by investing in both DTF Tax and MFS High 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 DTF Tax and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTF Tax Free and MFS High Income, you can compare the effects of market volatilities on DTF Tax and MFS High 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 DTF Tax with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTF Tax and MFS High.
Diversification Opportunities for DTF Tax and MFS High
Modest diversification
The 3 months correlation between DTF and MFS is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding DTF Tax Free and MFS High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS High Income and DTF Tax 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 DTF Tax Free are associated (or correlated) with MFS High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS High Income has no effect on the direction of DTF Tax i.e., DTF Tax and MFS High go up and down completely randomly.
Pair Corralation between DTF Tax and MFS High
Considering the 90-day investment horizon DTF Tax Free is expected to generate 0.45 times more return on investment than MFS High. However, DTF Tax Free is 2.22 times less risky than MFS High. It trades about 0.07 of its potential returns per unit of risk. MFS High Income is currently generating about -0.03 per unit of risk. If you would invest 1,107 in DTF Tax Free on May 2, 2025 and sell it today you would earn a total of 12.00 from holding DTF Tax Free or generate 1.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
DTF Tax Free vs. MFS High Income
Performance |
| Timeline |
| DTF Tax Free |
| MFS High Income |
DTF Tax and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTF Tax and MFS High
The main advantage of trading using opposite DTF Tax and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTF Tax position performs unexpectedly, MFS High 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 High will offset losses from the drop in MFS High's long position.| DTF Tax vs. BlackRock Long Term Municipal | DTF Tax vs. MFS High Income | DTF Tax vs. MFS Investment Grade | DTF Tax vs. Bny Mellon Strategic |
| MFS High vs. MFS High Yield | MFS High vs. MFS Investment Grade | MFS High vs. MFS Municipal Income | MFS High 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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