Correlation Between Mfs Blended and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Mfs Blended and Vanguard 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 Vanguard 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Mfs Blended and Vanguard 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Blended and Vanguard Emerging.
Diversification Opportunities for Mfs Blended and Vanguard Emerging
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Vanguard is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Blended Research and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Mfs Blended i.e., Mfs Blended and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Mfs Blended and Vanguard Emerging
Assuming the 90 days horizon Mfs Blended Research is expected to generate 1.21 times more return on investment than Vanguard Emerging. However, Mfs Blended is 1.21 times more volatile than Vanguard Emerging Markets. It trades about -0.03 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.07 per unit of risk. If you would invest 1,291 in Mfs Blended Research on January 24, 2024 and sell it today you would lose (6.00) from holding Mfs Blended Research or give up 0.46% 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. Vanguard Emerging Markets
Performance |
| Timeline |
| Mfs Blended Research |
| Vanguard Emerging Markets |
Mfs Blended and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Blended and Vanguard Emerging
The main advantage of trading using opposite Mfs Blended and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Blended position performs unexpectedly, Vanguard 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 Vanguard Emerging will offset losses from the drop in Vanguard 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 |
| Vanguard Emerging vs. Vanguard Materials Index | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Limited Term Tax Exempt | Vanguard Emerging vs. Vanguard Global Minimum |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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