Correlation Between Mfs Emerging and Intel
Can any of the company-specific risk be diversified away by investing in both Mfs Emerging and Intel 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 Intel 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 Intel, you can compare the effects of market volatilities on Mfs Emerging and Intel 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 Intel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Emerging and Intel.
Diversification Opportunities for Mfs Emerging and Intel
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Intel is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Emerging Markets and Intel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intel 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 Intel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intel has no effect on the direction of Mfs Emerging i.e., Mfs Emerging and Intel go up and down completely randomly.
Pair Corralation between Mfs Emerging and Intel
Assuming the 90 days horizon Mfs Emerging Markets is expected to generate 0.2 times more return on investment than Intel. However, Mfs Emerging Markets is 5.1 times less risky than Intel. It trades about -0.33 of its potential returns per unit of risk. Intel is currently generating about -0.33 per unit of risk. If you would invest 559.00 in Mfs Emerging Markets on January 25, 2024 and sell it today you would lose (20.00) from holding Mfs Emerging Markets or give up 3.58% 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. Intel
Performance |
| Timeline |
| Mfs Emerging Markets |
| Intel |
Mfs Emerging and Intel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Emerging and Intel
The main advantage of trading using opposite Mfs Emerging and Intel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Emerging position performs unexpectedly, Intel 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 Intel will offset losses from the drop in Intel's long position.| Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Pimco Emerging Local | Mfs Emerging vs. Pimco Emerging Local |
| Intel vs. NVIDIA | Intel vs. Taiwan Semiconductor Manufacturing | Intel vs. Marvell Technology Group | Intel vs. Micron Technology |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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