Correlation Between Baird Aggregate and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Baird Aggregate 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 Baird Aggregate and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Baird Aggregate Bond and Mfs Emerging Markets, you can compare the effects of market volatilities on Baird Aggregate 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 Baird Aggregate with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Baird Aggregate and Mfs Emerging.
Diversification Opportunities for Baird Aggregate and Mfs Emerging
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BAIRD and Mfs is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Baird Aggregate Bond 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 Baird Aggregate 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 Baird Aggregate Bond 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 Baird Aggregate i.e., Baird Aggregate and Mfs Emerging go up and down completely randomly.
Pair Corralation between Baird Aggregate and Mfs Emerging
Assuming the 90 days horizon Baird Aggregate Bond is expected to generate 1.35 times more return on investment than Mfs Emerging. However, Baird Aggregate is 1.35 times more volatile than Mfs Emerging Markets. It trades about -0.13 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about -0.19 per unit of risk. If you would invest 1,004 in Baird Aggregate Bond on August 29, 2024 and sell it today you would lose (19.00) from holding Baird Aggregate Bond or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Baird Aggregate Bond vs. Mfs Emerging Markets
Performance |
| Timeline |
| Baird Aggregate Bond |
| Mfs Emerging Markets |
Baird Aggregate and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Baird Aggregate and Mfs Emerging
The main advantage of trading using opposite Baird Aggregate and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Baird Aggregate 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.| Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond | Baird Aggregate vs. Vanguard Total Bond |
| Mfs Emerging vs. Cutler Equity | Mfs Emerging vs. Dreyfusstandish Global Fixed | Mfs Emerging vs. Doubleline E Fixed | Mfs Emerging vs. The Hartford Equity |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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