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
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Stone is 0.75. 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 Markets is expected to generate 1.71 times more return on investment than Stone Harbor. However, Mfs Emerging is 1.71 times more volatile than Stone Harbor Emerging. It trades about 0.14 of its potential returns per unit of risk. Stone Harbor Emerging is currently generating about 0.2 per unit of risk. If you would invest 1,167 in Mfs Emerging Markets on September 3, 2024 and sell it today you would earn a total of 53.00 from holding Mfs Emerging Markets or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| 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. Franklin High Yield | Mfs Emerging vs. Limited Term Tax | Mfs Emerging vs. Morningstar Municipal Bond | Mfs Emerging vs. California High Yield Municipal |
| Stone Harbor vs. Angel Oak Financial | Stone Harbor vs. Ab Impact Municipal | Stone Harbor vs. Maryland Tax Free Bond | Stone Harbor vs. Bbh Intermediate Municipal |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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