Correlation Between Investec Emerging and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Investec Emerging 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 Investec Emerging and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Emerging Markets and Mfs Emerging Markets, you can compare the effects of market volatilities on Investec Emerging 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 Investec Emerging with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec Emerging and Mfs Emerging.
Diversification Opportunities for Investec Emerging and Mfs Emerging
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Investec and Mfs is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Investec Emerging Markets 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 Investec Emerging 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 Investec Emerging Markets 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 Investec Emerging i.e., Investec Emerging and Mfs Emerging go up and down completely randomly.
Pair Corralation between Investec Emerging and Mfs Emerging
Assuming the 90 days horizon Investec Emerging Markets is expected to generate 2.56 times more return on investment than Mfs Emerging. However, Investec Emerging is 2.56 times more volatile than Mfs Emerging Markets. It trades about 0.04 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.07 per unit of risk. If you would invest 935.00 in Investec Emerging Markets on October 25, 2024 and sell it today you would earn a total of 147.00 from holding Investec Emerging Markets or generate 15.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Investec Emerging Markets vs. Mfs Emerging Markets
Performance |
| Timeline |
| Investec Emerging Markets |
| Mfs Emerging Markets |
Investec Emerging and Mfs Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec Emerging and Mfs Emerging
The main advantage of trading using opposite Investec Emerging and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec Emerging 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.| Investec Emerging vs. Ab All Market | Investec Emerging vs. Barings Emerging Markets | Investec Emerging vs. Alphacentric Hedged Market | Investec Emerging vs. Dws Emerging Markets |
| Mfs Emerging vs. Investec Emerging Markets | Mfs Emerging vs. Black Oak Emerging | Mfs Emerging vs. Morgan Stanley Emerging | Mfs Emerging vs. Vanguard Lifestrategy Moderate |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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