Correlation Between Vanguard Total and Mfs International
Can any of the company-specific risk be diversified away by investing in both Vanguard Total and Mfs 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 Vanguard Total and Mfs International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Total International and Mfs International Diversification, you can compare the effects of market volatilities on Vanguard Total and Mfs 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 Vanguard Total with a short position of Mfs International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Total and Mfs International.
Diversification Opportunities for Vanguard Total and Mfs International
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Vanguard and Mfs is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total International and Mfs International Diversificat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International and Vanguard Total 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 Vanguard Total International are associated (or correlated) with Mfs International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International has no effect on the direction of Vanguard Total i.e., Vanguard Total and Mfs International go up and down completely randomly.
Pair Corralation between Vanguard Total and Mfs International
Assuming the 90 days horizon Vanguard Total International is expected to generate 1.05 times more return on investment than Mfs International. However, Vanguard Total is 1.05 times more volatile than Mfs International Diversification. It trades about 0.06 of its potential returns per unit of risk. Mfs International Diversification is currently generating about 0.06 per unit of risk. If you would invest 10,732 in Vanguard Total International on August 29, 2024 and sell it today you would earn a total of 2,376 from holding Vanguard Total International or generate 22.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Total International vs. Mfs International Diversificat
Performance |
| Timeline |
| Vanguard Total Inter |
| Mfs International |
Vanguard Total and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Total and Mfs International
The main advantage of trading using opposite Vanguard Total and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total position performs unexpectedly, Mfs 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 Mfs International will offset losses from the drop in Mfs International's long position.| Vanguard Total vs. California Bond Fund | Vanguard Total vs. Kinetics Market Opportunities | Vanguard Total vs. Multisector Bond Sma | Vanguard Total vs. Artisan Emerging Markets |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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