Correlation Between Mfs Emerging and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Emerging Markets 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 Emerging Markets 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 Emerging Markets Bond, you can compare the effects of market volatilities on Mfs Emerging and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Emerging Markets.
Diversification Opportunities for Mfs Emerging and Emerging Markets
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Emerging is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Emerging Markets Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Bond 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Bond has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Emerging Markets go up and down completely randomly.
Pair Corralation between Mfs Emerging and Emerging Markets
Assuming the 90 days horizon Mfs Emerging is expected to generate 1.14 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Mfs Emerging Markets is 1.05 times less risky than Emerging Markets. It trades about 0.09 of its potential returns per unit of risk. Emerging Markets Bond is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 713.00 in Emerging Markets Bond on August 30, 2024 and sell it today you would earn a total of 145.00 from holding Emerging Markets Bond or generate 20.34% 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. Emerging Markets Bond
Performance |
| Timeline |
| Mfs Emerging Markets |
| Emerging Markets Bond |
Mfs Emerging and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Emerging Markets
The main advantage of trading using opposite Mfs Emerging and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Mfs Emerging vs. Cutler Equity | Mfs Emerging vs. Dreyfusstandish Global Fixed | Mfs Emerging vs. Doubleline E Fixed | Mfs Emerging vs. The Hartford Equity |
| Emerging Markets vs. Astor Longshort Fund | Emerging Markets vs. Barings Active Short | Emerging Markets vs. Vanguard Short Term Federal | Emerging Markets vs. Aqr Long Short Equity |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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