Correlation Between Invesco Global and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Invesco Global and Mfs Emerging 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 Global and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Invesco Global Real and Mfs Emerging Markets, you can compare the effects of market volatilities on Invesco Global and Mfs Emerging 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 Global with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Invesco Global and Mfs Emerging.
Diversification Opportunities for Invesco Global and Mfs Emerging
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Invesco and Mfs is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Invesco Global Real and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets and Invesco Global 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 Global Real are associated (or correlated) with Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Invesco Global i.e., Invesco Global and Mfs Emerging go up and down completely randomly.
Pair Corralation between Invesco Global and Mfs Emerging
Assuming the 90 days horizon Invesco Global Real is expected to generate 2.72 times more return on investment than Mfs Emerging. However, Invesco Global is 2.72 times more volatile than Mfs Emerging Markets. It trades about 0.15 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.04 per unit of risk. If you would invest 916.00 in Invesco Global Real on September 1, 2024 and sell it today you would earn a total of 23.00 from holding Invesco Global Real or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Invesco Global Real vs. Mfs Emerging Markets
Performance |
| Timeline |
| Invesco Global Real |
| Mfs Emerging Markets |
Invesco Global and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Invesco Global and Mfs Emerging
The main advantage of trading using opposite Invesco Global and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Invesco Global position performs unexpectedly, Mfs Emerging 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 Emerging will offset losses from the drop in Mfs Emerging's long position.| Invesco Global vs. Virtus High Yield | Invesco Global vs. Metropolitan West High | Invesco Global vs. Gmo High Yield | Invesco Global vs. Legg Mason Partners |
| Mfs Emerging vs. Dreyfus Government Cash | Mfs Emerging vs. Ab Government Exchange | Mfs Emerging vs. Dws Government Money | Mfs Emerging vs. Virtus Seix Government |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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