Correlation Between Mfs Emerging and International Business
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and International Business 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 International Business 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 International Business Machines, you can compare the effects of market volatilities on Mfs Emerging and International Business 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 International Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and International Business.
Diversification Opportunities for Mfs Emerging and International Business
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Mfs and International is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and International Business Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Business 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 International Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Business has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and International Business go up and down completely randomly.
Pair Corralation between Mfs Emerging and International Business
Assuming the 90 days horizon Mfs Emerging Markets is expected to under-perform the International Business. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mfs Emerging Markets is 1.75 times less risky than International Business. The mutual fund trades about -0.33 of its potential returns per unit of risk. The International Business Machines is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 18,879 in International Business Machines on January 25, 2024 and sell it today you would lose (548.00) from holding International Business Machines or give up 2.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Emerging Markets vs. International Business Machine
Performance |
| Timeline |
| Mfs Emerging Markets |
| International Business |
Mfs Emerging and International Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and International Business
The main advantage of trading using opposite Mfs Emerging and International Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, International Business 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 International Business will offset losses from the drop in International Business' long position.| Mfs Emerging vs. Pimco Emerging Markets | Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Pimco Emerging Local |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |