Correlation Between Invesco Municipal and MFS High
Can any of the company-specific risk be diversified away by investing in both Invesco Municipal 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 Invesco Municipal and MFS High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Municipal Income and MFS High Income, you can compare the effects of market volatilities on Invesco Municipal 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 Invesco Municipal with a short position of MFS High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Municipal and MFS High.
Diversification Opportunities for Invesco Municipal and MFS High
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Invesco and MFS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Municipal Income 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 Invesco 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 Invesco Municipal Income 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 Invesco Municipal i.e., Invesco Municipal and MFS High go up and down completely randomly.
Pair Corralation between Invesco Municipal and MFS High
Considering the 90-day investment horizon Invesco Municipal Income is expected to under-perform the MFS High. In addition to that, Invesco Municipal is 1.2 times more volatile than MFS High Income. It trades about -0.01 of its total potential returns per unit of risk. MFS High Income is currently generating about 0.01 per unit of volatility. If you would invest 350.00 in MFS High Income on March 24, 2025 and sell it today you would earn a total of 2.00 from holding MFS High Income or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Invesco Municipal Income vs. MFS High Income
Performance |
| Timeline |
| Invesco Municipal Income |
| MFS High Income |
Invesco Municipal and MFS High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Municipal and MFS High
The main advantage of trading using opposite Invesco Municipal and MFS High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Municipal 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.| Invesco Municipal vs. DWS Municipal Income | Invesco Municipal vs. MFS Municipal Income | Invesco Municipal vs. MFS High Income | Invesco Municipal vs. Blackrock Muniyield |
| MFS High vs. MFS Investment Grade | MFS High vs. Eaton Vance National | MFS High vs. Blackrock Muniholdings Ny | MFS High vs. Nuveen California Select |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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