Correlation Between Emerging Markets and Msif International
Can any of the company-specific risk be diversified away by investing in both Emerging Markets 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 Emerging Markets and Msif International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Markets Equity and Msif International Opportunity, you can compare the effects of market volatilities on Emerging Markets 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 Emerging Markets with a short position of Msif International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Markets and Msif International.
Diversification Opportunities for Emerging Markets and Msif International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Emerging and Msif is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Markets Equity and Msif International Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif International and Emerging Markets 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 Emerging Markets Equity 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 Emerging Markets i.e., Emerging Markets and Msif International go up and down completely randomly.
Pair Corralation between Emerging Markets and Msif International
Assuming the 90 days horizon Emerging Markets Equity is expected to under-perform the Msif International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Emerging Markets Equity is 1.02 times less risky than Msif International. The mutual fund trades about -0.18 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 Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Markets Equity vs. Msif International Opportunity
Performance |
| Timeline |
| Emerging Markets Equity |
| Msif International |
Emerging Markets and Msif International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Markets and Msif International
The main advantage of trading using opposite Emerging Markets and Msif International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Markets 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.| Emerging Markets vs. Global Fixed Income | Emerging Markets vs. Global Fixed Income | Emerging Markets vs. Global Fixed Income | Emerging Markets vs. Global E Portfolio |
| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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