Correlation Between Mfs Technology and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Mfs Technology 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 Technology 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 Technology Fund and Emerging Markets Portfolio, you can compare the effects of market volatilities on Mfs Technology 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 Technology with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Technology and Emerging Markets.
Diversification Opportunities for Mfs Technology and Emerging Markets
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mfs and Emerging is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Technology Fund and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Mfs Technology 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 Technology Fund 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 Por has no effect on the direction of Mfs Technology i.e., Mfs Technology and Emerging Markets go up and down completely randomly.
Pair Corralation between Mfs Technology and Emerging Markets
Assuming the 90 days horizon Mfs Technology Fund is expected to generate 1.44 times more return on investment than Emerging Markets. However, Mfs Technology is 1.44 times more volatile than Emerging Markets Portfolio. It trades about 0.09 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.02 per unit of risk. If you would invest 7,017 in Mfs Technology Fund on September 1, 2024 and sell it today you would earn a total of 1,055 from holding Mfs Technology Fund or generate 15.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Technology Fund vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Mfs Technology |
| Emerging Markets Por |
Mfs Technology and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Technology and Emerging Markets
The main advantage of trading using opposite Mfs Technology and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Technology 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 Technology vs. Touchstone Premium Yield | Mfs Technology vs. Artisan High Income | Mfs Technology vs. T Rowe Price | Mfs Technology vs. Thrivent Income Fund |
| Emerging Markets vs. Lord Abbett Convertible | Emerging Markets vs. Gabelli Convertible And | Emerging Markets vs. Allianzgi Convertible Income | Emerging Markets vs. Columbia Vertible Securities |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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