Correlation Between Mfs Emerging and Inflation Protected
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Inflation Protected 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 Mfs Emerging and Inflation Protected into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Emerging Markets and Inflation Protected Bond Fund, you can compare the effects of market volatilities on Mfs Emerging and Inflation Protected 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 Mfs Emerging with a short position of Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Inflation Protected.
Diversification Opportunities for Mfs Emerging and Inflation Protected
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mfs and Inflation is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected and Mfs Emerging 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 Mfs Emerging Markets are associated (or correlated) with Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Inflation Protected go up and down completely randomly.
Pair Corralation between Mfs Emerging and Inflation Protected
Assuming the 90 days horizon Mfs Emerging Markets is expected to under-perform the Inflation Protected. In addition to that, Mfs Emerging is 1.05 times more volatile than Inflation Protected Bond Fund. It trades about -0.12 of its total potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.12 per unit of volatility. If you would invest 1,006 in Inflation Protected Bond Fund on September 12, 2024 and sell it today you would earn a total of 28.00 from holding Inflation Protected Bond Fund or generate 2.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Emerging Markets vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Mfs Emerging Markets |
| Inflation Protected |
Mfs Emerging and Inflation Protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Inflation Protected
The main advantage of trading using opposite Mfs Emerging and Inflation Protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Inflation Protected 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 Inflation Protected will offset losses from the drop in Inflation Protected's long position.| Mfs Emerging vs. Fidelity Managed Retirement | Mfs Emerging vs. Pro Blend Moderate Term | Mfs Emerging vs. Blackrock Moderate Prepared | Mfs Emerging vs. Saat Moderate Strategy |
| Inflation Protected vs. Aqr Large Cap | Inflation Protected vs. Pace Large Growth | Inflation Protected vs. Old Westbury Large | Inflation Protected vs. Rational Strategic Allocation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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