Correlation Between Metropolitan West and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Metropolitan West 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 Metropolitan West and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metropolitan West Unconstrained and Mfs Emerging Markets, you can compare the effects of market volatilities on Metropolitan West 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 Metropolitan West with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metropolitan West and Mfs Emerging.
Diversification Opportunities for Metropolitan West and Mfs Emerging
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Metropolitan and Mfs is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Metropolitan West Unconstraine 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 Metropolitan West 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 Metropolitan West Unconstrained 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 Metropolitan West i.e., Metropolitan West and Mfs Emerging go up and down completely randomly.
Pair Corralation between Metropolitan West and Mfs Emerging
Assuming the 90 days horizon Metropolitan West is expected to generate 1.71 times less return on investment than Mfs Emerging. But when comparing it to its historical volatility, Metropolitan West Unconstrained is 1.44 times less risky than Mfs Emerging. It trades about 0.22 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,195 in Mfs Emerging Markets on November 28, 2024 and sell it today you would earn a total of 16.00 from holding Mfs Emerging Markets or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metropolitan West Unconstraine vs. Mfs Emerging Markets
Performance |
| Timeline |
| Metropolitan West |
| Mfs Emerging Markets |
Metropolitan West and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metropolitan West and Mfs Emerging
The main advantage of trading using opposite Metropolitan West and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metropolitan West 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.| Metropolitan West vs. Metropolitan West Porate | Metropolitan West vs. Metropolitan West Unconstrained | Metropolitan West vs. Metropolitan West Unconstrained | Metropolitan West vs. Metwest Esg Securitized |
| Mfs Emerging vs. Inflation Linked Fixed Income | Mfs Emerging vs. Cref Inflation Linked Bond | Mfs Emerging vs. The Hartford Inflation | Mfs Emerging vs. Simt Multi Asset Inflation |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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