Correlation Between Corporate Bond and Msif International
Can any of the company-specific risk be diversified away by investing in both Corporate Bond and Msif International 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 Corporate Bond and Msif International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Bond Portfolio and Msif International Opportunity, you can compare the effects of market volatilities on Corporate Bond and Msif International 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 Corporate Bond with a short position of Msif International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Bond and Msif International.
Diversification Opportunities for Corporate Bond and Msif International
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Corporate and Msif is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Bond Portfolio and Msif International Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif International and Corporate Bond 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 Corporate Bond Portfolio are associated (or correlated) with Msif International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif International has no effect on the direction of Corporate Bond i.e., Corporate Bond and Msif International go up and down completely randomly.
Pair Corralation between Corporate Bond and Msif International
Assuming the 90 days horizon Corporate Bond Portfolio is expected to under-perform the Msif International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Corporate Bond Portfolio is 2.5 times less risky than Msif International. The mutual fund trades about -0.13 of its potential returns per unit of risk. The Msif International Opportunity is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,992 in Msif International Opportunity on August 28, 2024 and sell it today you would lose (45.00) from holding Msif International Opportunity or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Bond Portfolio vs. Msif International Opportunity
Performance |
| Timeline |
| Corporate Bond Portfolio |
| Msif International |
Corporate Bond and Msif International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Bond and Msif International
The main advantage of trading using opposite Corporate Bond and Msif International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Bond position performs unexpectedly, Msif International 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 Msif International will offset losses from the drop in Msif International's long position.| Corporate Bond vs. International Equity Portfolio | Corporate Bond vs. Royce Special Equity | Corporate Bond vs. Growth Portfolio Class | Corporate Bond vs. Small Pany Growth |
| Msif International vs. Global Opportunity Portfolio | Msif International vs. Morgan Stanley Multi | Msif International vs. Growth Portfolio Class | Msif International vs. Baron Global Advantage |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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