Correlation Between Stone Ridge and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Stone Ridge 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 Stone Ridge and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Ridge Diversified and Mfs Emerging Markets, you can compare the effects of market volatilities on Stone Ridge 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 Stone Ridge with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Ridge and Mfs Emerging.
Diversification Opportunities for Stone Ridge and Mfs Emerging
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stone and Mfs is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Stone Ridge Diversified 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 Stone Ridge 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 Stone Ridge Diversified 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 Stone Ridge i.e., Stone Ridge and Mfs Emerging go up and down completely randomly.
Pair Corralation between Stone Ridge and Mfs Emerging
Assuming the 90 days horizon Stone Ridge Diversified is expected to generate 0.71 times more return on investment than Mfs Emerging. However, Stone Ridge Diversified is 1.4 times less risky than Mfs Emerging. It trades about 0.24 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.14 per unit of risk. If you would invest 1,132 in Stone Ridge Diversified on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Stone Ridge Diversified or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stone Ridge Diversified vs. Mfs Emerging Markets
Performance |
| Timeline |
| Stone Ridge Diversified |
| Mfs Emerging Markets |
Stone Ridge and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stone Ridge and Mfs Emerging
The main advantage of trading using opposite Stone Ridge and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Ridge 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.| Stone Ridge vs. Barings Global Floating | Stone Ridge vs. Legg Mason Global | Stone Ridge vs. Siit Global Managed | Stone Ridge vs. Ab Global Risk |
| Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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