Correlation Between Mfs Value and The Emerging
Can any of the company-specific risk be diversified away by investing in both Mfs Value and The Emerging 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 Value and The Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Value Fund and The Emerging Markets, you can compare the effects of market volatilities on Mfs Value and The Emerging 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 Value with a short position of The Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Value and The Emerging.
Diversification Opportunities for Mfs Value and The Emerging
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Mfs and The is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Value Fund and The Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets and Mfs Value 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 Value Fund are associated (or correlated) with The Emerging. 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 has no effect on the direction of Mfs Value i.e., Mfs Value and The Emerging go up and down completely randomly.
Pair Corralation between Mfs Value and The Emerging
Assuming the 90 days horizon Mfs Value Fund is expected to generate 0.87 times more return on investment than The Emerging. However, Mfs Value Fund is 1.15 times less risky than The Emerging. It trades about 0.26 of its potential returns per unit of risk. The Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest 5,182 in Mfs Value Fund on September 4, 2024 and sell it today you would earn a total of 211.00 from holding Mfs Value Fund or generate 4.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Value Fund vs. The Emerging Markets
Performance |
| Timeline |
| Mfs Value Fund |
| Emerging Markets |
Mfs Value and The Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Value and The Emerging
The main advantage of trading using opposite Mfs Value and The Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Value position performs unexpectedly, The Emerging 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 The Emerging will offset losses from the drop in The Emerging's long position.| Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor | Mfs Value vs. Mfs Prudent Investor |
| The Emerging vs. Vanguard Total Stock | The Emerging vs. Vanguard 500 Index | The Emerging vs. Vanguard Total Stock | The Emerging vs. Vanguard Total Stock |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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