Correlation Between Mfs Emerging and Fam Small
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Fam Small 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 Fam Small 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 Fam Small Cap, you can compare the effects of market volatilities on Mfs Emerging and Fam Small 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 Fam Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Fam Small.
Diversification Opportunities for Mfs Emerging and Fam Small
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Fam is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Fam Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fam Small Cap 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 Fam Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fam Small Cap has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Fam Small go up and down completely randomly.
Pair Corralation between Mfs Emerging and Fam Small
Assuming the 90 days horizon Mfs Emerging Markets is expected to generate 0.28 times more return on investment than Fam Small. However, Mfs Emerging Markets is 3.62 times less risky than Fam Small. It trades about 0.25 of its potential returns per unit of risk. Fam Small Cap is currently generating about 0.04 per unit of risk. If you would invest 1,181 in Mfs Emerging Markets on November 30, 2024 and sell it today you would earn a total of 32.00 from holding Mfs Emerging Markets or generate 2.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Emerging Markets vs. Fam Small Cap
Performance |
| Timeline |
| Mfs Emerging Markets |
| Fam Small Cap |
Mfs Emerging and Fam Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Fam Small
The main advantage of trading using opposite Mfs Emerging and Fam Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Fam Small 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 Fam Small will offset losses from the drop in Fam Small's long position.| Mfs Emerging vs. Artisan Small Cap | Mfs Emerging vs. Glg Intl Small | Mfs Emerging vs. Ab Small Cap | Mfs Emerging vs. Small Pany Growth |
| Fam Small vs. Moderate Strategy Fund | Fam Small vs. Hartford Moderate Allocation | Fam Small vs. American Funds Retirement | Fam Small vs. Blackrock Retirement Income |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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