Correlation Between Mfs Emerging and Mfs International
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Mfs International 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 Mfs International 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 Mfs International Value, you can compare the effects of market volatilities on Mfs Emerging and Mfs International 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 Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Mfs International.
Diversification Opportunities for Mfs Emerging and Mfs International
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Mfs International Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Value 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 Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Value has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Mfs International go up and down completely randomly.
Pair Corralation between Mfs Emerging and Mfs International
Assuming the 90 days horizon Mfs Emerging Markets is expected to under-perform the Mfs International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Emerging Markets is 1.73 times less risky than Mfs International. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Mfs International Value is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,160 in Mfs International Value on September 1, 2024 and sell it today you would lose (17.00) from holding Mfs International Value or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mfs Emerging Markets vs. Mfs International Value
Performance |
| Timeline |
| Mfs Emerging Markets |
| Mfs International Value |
Mfs Emerging and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Mfs International
The main advantage of trading using opposite Mfs Emerging and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor |
| Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International vs. Mfs Prudent Investor | Mfs International 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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