Correlation Between Stone Harbor and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Stone Harbor and Mfs 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 Stone Harbor and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stone Harbor Local and Mfs Emerging Markets, you can compare the effects of market volatilities on Stone Harbor and Mfs 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 Stone Harbor with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stone Harbor and Mfs Emerging.
Diversification Opportunities for Stone Harbor and Mfs Emerging
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Stone and Mfs is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Stone Harbor Local and Mfs Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Emerging Markets and Stone Harbor 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 Stone Harbor Local are associated (or correlated) with Mfs Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Emerging Markets has no effect on the direction of Stone Harbor i.e., Stone Harbor and Mfs Emerging go up and down completely randomly.
Pair Corralation between Stone Harbor and Mfs Emerging
Assuming the 90 days horizon Stone Harbor Local is expected to generate 1.02 times more return on investment than Mfs Emerging. However, Stone Harbor is 1.02 times more volatile than Mfs Emerging Markets. It trades about -0.21 of its potential returns per unit of risk. Mfs Emerging Markets is currently generating about -0.29 per unit of risk. If you would invest 820.00 in Stone Harbor Local on January 25, 2024 and sell it today you would lose (20.00) from holding Stone Harbor Local or give up 2.44% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Stone Harbor Local vs. Mfs Emerging Markets
Performance |
Timeline |
Stone Harbor Local |
Mfs Emerging Markets |
Stone Harbor and Mfs Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Stone Harbor and Mfs Emerging
The main advantage of trading using opposite Stone Harbor and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stone Harbor position performs unexpectedly, Mfs 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 Mfs Emerging will offset losses from the drop in Mfs Emerging's long position.Stone Harbor vs. Pimco Emerging Markets | Stone Harbor vs. Pimco Emerging Local | Stone Harbor vs. Pimco Emerging Local | Stone Harbor vs. Pimco Emerging Local |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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