Correlation Between Dana Large and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Dana Large 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 Dana Large and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Mfs Emerging Markets, you can compare the effects of market volatilities on Dana Large 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 Dana Large with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Mfs Emerging.
Diversification Opportunities for Dana Large and Mfs Emerging
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Dana and Mfs is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap 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 Dana Large 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 Dana Large Cap 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 Dana Large i.e., Dana Large and Mfs Emerging go up and down completely randomly.
Pair Corralation between Dana Large and Mfs Emerging
Assuming the 90 days horizon Dana Large Cap is expected to generate 2.7 times more return on investment than Mfs Emerging. However, Dana Large is 2.7 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 0.12 per unit of risk. If you would invest 2,091 in Dana Large Cap on September 14, 2024 and sell it today you would earn a total of 612.00 from holding Dana Large Cap or generate 29.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Mfs Emerging Markets
Performance |
| Timeline |
| Dana Large Cap |
| Mfs Emerging Markets |
Dana Large and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Mfs Emerging
The main advantage of trading using opposite Dana Large and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large 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.| Dana Large vs. Chestnut Street Exchange | Dana Large vs. Putnam Money Market | Dana Large vs. Blackrock Exchange Portfolio | Dana Large vs. Matson Money Equity |
| Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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