Correlation Between Microsoft and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mfs 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 Microsoft and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mfs Emerging Markets, you can compare the effects of market volatilities on Microsoft and Mfs 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 Microsoft with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mfs Emerging.
Diversification Opportunities for Microsoft and Mfs Emerging
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Microsoft and Mfs is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets and Microsoft 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 Microsoft are associated (or correlated) with Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Microsoft i.e., Microsoft and Mfs Emerging go up and down completely randomly.
Pair Corralation between Microsoft and Mfs Emerging
Given the investment horizon of 90 days Microsoft is expected to generate 4.27 times more return on investment than Mfs Emerging. However, Microsoft is 4.27 times more volatile than Mfs Emerging Markets. It trades about 0.51 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.16 per unit of risk. If you would invest 41,493 in Microsoft on September 18, 2024 and sell it today you would earn a total of 3,953 from holding Microsoft or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Mfs Emerging Markets
Performance |
| Timeline |
| Microsoft |
| Mfs Emerging Markets |
Microsoft and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Mfs Emerging
The main advantage of trading using opposite Microsoft and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mfs 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 Mfs Emerging will offset losses from the drop in Mfs Emerging's long position.| Microsoft vs. Global Blue Group | Microsoft vs. Aurora Mobile | Microsoft vs. Marqeta | Microsoft vs. Nextnav Acquisition Corp |
| Mfs Emerging vs. Sarofim Equity | Mfs Emerging vs. Ab Fixed Income Shares | Mfs Emerging vs. Us Strategic Equity | Mfs Emerging vs. Dreyfusnewton International 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |