Correlation Between Mfs Blended and Causeway Emerging
Can any of the company-specific risk be diversified away by investing in both Mfs Blended and Causeway 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 Mfs Blended and Causeway Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Blended Research and Causeway Emerging Markets, you can compare the effects of market volatilities on Mfs Blended and Causeway 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 Mfs Blended with a short position of Causeway Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and Causeway Emerging.
Diversification Opportunities for Mfs Blended and Causeway Emerging
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Mfs and Causeway is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and Causeway Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Causeway Emerging Markets and Mfs Blended 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 Mfs Blended Research are associated (or correlated) with Causeway Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Causeway Emerging Markets has no effect on the direction of Mfs Blended i.e., Mfs Blended and Causeway Emerging go up and down completely randomly.
Pair Corralation between Mfs Blended and Causeway Emerging
Assuming the 90 days horizon Mfs Blended Research is expected to under-perform the Causeway Emerging. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Blended Research is 1.1 times less risky than Causeway Emerging. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Causeway Emerging Markets is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,052 in Causeway Emerging Markets on January 20, 2024 and sell it today you would lose (3.00) from holding Causeway Emerging Markets or give up 0.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Blended Research vs. Causeway Emerging Markets
Performance |
| Timeline |
| Mfs Blended Research |
| Causeway Emerging Markets |
Mfs Blended and Causeway Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Blended and Causeway Emerging
The main advantage of trading using opposite Mfs Blended and Causeway Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Blended position performs unexpectedly, Causeway 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 Causeway Emerging will offset losses from the drop in Causeway Emerging's long position.| Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor | Mfs Blended vs. Mfs Prudent Investor |
| Causeway Emerging vs. Causeway International Small | Causeway Emerging vs. Causeway Global Value | Causeway Emerging vs. Causeway Global Value | Causeway Emerging vs. Causeway International Opportunities |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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