Correlation Between Mfs Emerging and Pimco Emerging
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Pimco 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 Emerging and Pimco Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Emerging Markets and Pimco Emerging Local, you can compare the effects of market volatilities on Mfs Emerging and Pimco 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 Emerging with a short position of Pimco Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Pimco Emerging.
Diversification Opportunities for Mfs Emerging and Pimco Emerging
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Pimco is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Pimco Emerging Local in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco Emerging Local and Mfs 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 Mfs Emerging Markets are associated (or correlated) with Pimco Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco Emerging Local has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Pimco Emerging go up and down completely randomly.
Pair Corralation between Mfs Emerging and Pimco Emerging
Assuming the 90 days horizon Mfs Emerging Markets is expected to under-perform the Pimco Emerging. In addition to that, Mfs Emerging is 1.12 times more volatile than Pimco Emerging Local. It trades about -0.12 of its total potential returns per unit of risk. Pimco Emerging Local is currently generating about -0.06 per unit of volatility. If you would invest 580.00 in Pimco Emerging Local on January 24, 2024 and sell it today you would lose (9.00) from holding Pimco Emerging Local or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Emerging Markets vs. Pimco Emerging Local
Performance |
| Timeline |
| Mfs Emerging Markets |
| Pimco Emerging Local |
Mfs Emerging and Pimco Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Pimco Emerging
The main advantage of trading using opposite Mfs Emerging and Pimco Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Pimco 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 Pimco Emerging will offset losses from the drop in Pimco Emerging's long position.| Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor | Mfs Emerging vs. Mfs Prudent Investor |
| Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide | Pimco Emerging vs. Pimco Rae Worldwide |
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 Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |