Correlation Between Mfs Emerging and Stone Harbor
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Stone Harbor 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 Stone Harbor 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 Stone Harbor Emerging, you can compare the effects of market volatilities on Mfs Emerging and Stone Harbor 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 Stone Harbor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Stone Harbor.
Diversification Opportunities for Mfs Emerging and Stone Harbor
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Stone is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Stone Harbor Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stone Harbor Emerging 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 Stone Harbor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stone Harbor Emerging has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Stone Harbor go up and down completely randomly.
Pair Corralation between Mfs Emerging and Stone Harbor
Assuming the 90 days horizon Mfs Emerging is expected to generate 1.15 times less return on investment than Stone Harbor. But when comparing it to its historical volatility, Mfs Emerging Markets is 1.04 times less risky than Stone Harbor. It trades about 0.15 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 659.00 in Stone Harbor Emerging on September 4, 2024 and sell it today you would earn a total of 91.00 from holding Stone Harbor Emerging or generate 13.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Emerging Markets vs. Stone Harbor Emerging
Performance |
| Timeline |
| Mfs Emerging Markets |
| Stone Harbor Emerging |
Mfs Emerging and Stone Harbor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Stone Harbor
The main advantage of trading using opposite Mfs Emerging and Stone Harbor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Stone Harbor 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 Stone Harbor will offset losses from the drop in Stone Harbor's long position.| Mfs Emerging vs. Tax Managed Large Cap | Mfs Emerging vs. Dodge Cox Stock | Mfs Emerging vs. Vela Large Cap | Mfs Emerging vs. Transamerica Large Cap |
| Stone Harbor vs. Stone Harbor Local | Stone Harbor vs. Vanguard 500 Index | Stone Harbor vs. Vanguard Equity Income | Stone Harbor vs. Harbor Small Cap |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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