Correlation Between MFS Government and Voya Emerging
Can any of the company-specific risk be diversified away by investing in both MFS Government and Voya 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 Government and Voya Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MFS Government Markets and Voya Emerging Markets, you can compare the effects of market volatilities on MFS Government and Voya 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 Government with a short position of Voya Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of MFS Government and Voya Emerging.
Diversification Opportunities for MFS Government and Voya Emerging
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MFS and Voya is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding MFS Government Markets and Voya Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Emerging Markets and MFS Government 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 Government Markets are associated (or correlated) with Voya Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Emerging Markets has no effect on the direction of MFS Government i.e., MFS Government and Voya Emerging go up and down completely randomly.
Pair Corralation between MFS Government and Voya Emerging
Considering the 90-day investment horizon MFS Government Markets is expected to generate 0.58 times more return on investment than Voya Emerging. However, MFS Government Markets is 1.71 times less risky than Voya Emerging. It trades about 0.08 of its potential returns per unit of risk. Voya Emerging Markets is currently generating about 0.03 per unit of risk. If you would invest 295.00 in MFS Government Markets on August 31, 2024 and sell it today you would earn a total of 19.00 from holding MFS Government Markets or generate 6.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MFS Government Markets vs. Voya Emerging Markets
Performance |
| Timeline |
| MFS Government Markets |
| Voya Emerging Markets |
MFS Government and Voya Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MFS Government and Voya Emerging
The main advantage of trading using opposite MFS Government and Voya Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MFS Government position performs unexpectedly, Voya 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 Voya Emerging will offset losses from the drop in Voya Emerging's long position.| MFS Government vs. MFS Investment Grade | MFS Government vs. Invesco High Income | MFS Government vs. Eaton Vance National | MFS Government vs. Nuveen California Select |
| Voya Emerging vs. Nuveen Real Asset | Voya Emerging vs. Nuveen Mortgage Opportunity | Voya Emerging vs. Pgim Global High | Voya Emerging vs. Nuveen Core 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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