Correlation Between Applied Finance and Mfs Emerging
Can any of the company-specific risk be diversified away by investing in both Applied Finance 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 Applied Finance and Mfs Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Finance Explorer and Mfs Emerging Markets, you can compare the effects of market volatilities on Applied Finance 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 Applied Finance with a short position of Mfs Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Finance and Mfs Emerging.
Diversification Opportunities for Applied Finance and Mfs Emerging
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Applied and Mfs is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Applied Finance Explorer 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 Applied Finance 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 Applied Finance Explorer 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 Applied Finance i.e., Applied Finance and Mfs Emerging go up and down completely randomly.
Pair Corralation between Applied Finance and Mfs Emerging
Assuming the 90 days horizon Applied Finance Explorer is expected to under-perform the Mfs Emerging. In addition to that, Applied Finance is 1.39 times more volatile than Mfs Emerging Markets. It trades about -0.01 of its total potential returns per unit of risk. Mfs Emerging Markets is currently generating about 0.15 per unit of volatility. If you would invest 3,577 in Mfs Emerging Markets on September 18, 2024 and sell it today you would earn a total of 56.00 from holding Mfs Emerging Markets or generate 1.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Applied Finance Explorer vs. Mfs Emerging Markets
Performance |
Timeline |
Applied Finance Explorer |
Mfs Emerging Markets |
Applied Finance and Mfs Emerging Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Applied Finance and Mfs Emerging
The main advantage of trading using opposite Applied Finance and Mfs Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Finance 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.Applied Finance vs. Thrivent Small Cap | Applied Finance vs. Applied Finance Select | Applied Finance vs. Parnassus Endeavor Fund | Applied Finance vs. Queens Road Small |
Mfs Emerging vs. Applied Finance Explorer | Mfs Emerging vs. Great West Loomis Sayles | Mfs Emerging vs. Lsv Small Cap | Mfs Emerging vs. Amg River Road |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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