Correlation Between MFS Municipal and US GoldMining
Can any of the company-specific risk be diversified away by investing in both MFS Municipal and US GoldMining 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 US GoldMining 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 US GoldMining Common, you can compare the effects of market volatilities on MFS Municipal and US GoldMining 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 US GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Municipal and US GoldMining.
Diversification Opportunities for MFS Municipal and US GoldMining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MFS and USGO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding MFS Municipal Income and US GoldMining Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US GoldMining Common 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 US GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US GoldMining Common has no effect on the direction of MFS Municipal i.e., MFS Municipal and US GoldMining go up and down completely randomly.
Pair Corralation between MFS Municipal and US GoldMining
Considering the 90-day investment horizon MFS Municipal is expected to generate 3.18 times less return on investment than US GoldMining. But when comparing it to its historical volatility, MFS Municipal Income is 7.48 times less risky than US GoldMining. It trades about 0.11 of its potential returns per unit of risk. US GoldMining Common is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 938.00 in US GoldMining Common on September 7, 2025 and sell it today you would earn a total of 77.00 from holding US GoldMining Common or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Municipal Income vs. US GoldMining Common
Performance |
| Timeline |
| MFS Municipal Income |
| US GoldMining Common |
MFS Municipal and US GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Municipal and US GoldMining
The main advantage of trading using opposite MFS Municipal and US GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Municipal position performs unexpectedly, US GoldMining 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 US GoldMining will offset losses from the drop in US GoldMining's long position.| MFS Municipal vs. China Education Resources | MFS Municipal vs. Essential Utilities | MFS Municipal vs. IDP Education Limited | MFS Municipal vs. Quality Online Education |
| US GoldMining vs. Spirent Communications plc | US GoldMining vs. T Mobile US, 5500 | US GoldMining vs. Forum Mobile | US GoldMining vs. Japan Tobacco ADR |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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