Correlation Between Dfa International and Mfs Global
Can any of the company-specific risk be diversified away by investing in both Dfa International and Mfs Global 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 Dfa International and Mfs Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dfa International Real and Mfs Global Real, you can compare the effects of market volatilities on Dfa International and Mfs Global 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 Dfa International with a short position of Mfs Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dfa International and Mfs Global.
Diversification Opportunities for Dfa International and Mfs Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between DFA and Mfs is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Dfa International Real and Mfs Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Global Real and Dfa International 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 Dfa International Real are associated (or correlated) with Mfs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Global Real has no effect on the direction of Dfa International i.e., Dfa International and Mfs Global go up and down completely randomly.
Pair Corralation between Dfa International and Mfs Global
Assuming the 90 days horizon Dfa International is expected to generate 1.49 times less return on investment than Mfs Global. But when comparing it to its historical volatility, Dfa International Real is 1.1 times less risky than Mfs Global. It trades about 0.06 of its potential returns per unit of risk. Mfs Global Real is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,465 in Mfs Global Real on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Mfs Global Real or generate 20.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dfa International Real vs. Mfs Global Real
Performance |
| Timeline |
| Dfa International Real |
| Mfs Global Real |
Dfa International and Mfs Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dfa International and Mfs Global
The main advantage of trading using opposite Dfa International and Mfs Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dfa International position performs unexpectedly, Mfs Global 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 Global will offset losses from the drop in Mfs Global's long position.| Dfa International vs. International E Equity | Dfa International vs. Emerging Markets E | Dfa International vs. Us E Equity | Dfa International vs. Dfa International Small |
| Mfs Global vs. Fidelity Advisor Financial | Mfs Global vs. Financials Ultrasector Profund | Mfs Global vs. Davis Financial Fund | Mfs Global vs. Davis Financial Fund |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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