Correlation Between Msif Us and Msif International

Can any of the company-specific risk be diversified away by investing in both Msif Us and Msif International 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 Msif Us and Msif International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Msif Core Portfolio and Msif International Opportunity, you can compare the effects of market volatilities on Msif Us and Msif International 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 Msif Us with a short position of Msif International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Msif Us and Msif International.

Diversification Opportunities for Msif Us and Msif International

0.35

Correlation Coefficient

Msif Us  Msif International

Weak diversification

The 3 months correlation between Msif and Msif is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Msif Core Portfolio and Msif International Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif International and Msif Us 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 Msif Core Portfolio are associated (or correlated) with Msif International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif International has no effect on the direction of Msif Us i.e., Msif Us and Msif International go up and down completely randomly.

Pair Corralation between Msif Us and Msif International

Assuming the 90 days horizon Msif Core Portfolio is expected to generate 1.02 times more return on investment than Msif International. However, Msif Us is 1.02 times more volatile than Msif International Opportunity. It trades about -0.12 of its potential returns per unit of risk. Msif International Opportunity is currently generating about -0.21 per unit of risk. If you would invest  2,874  in Msif Core Portfolio on October 9, 2024 and sell it today you would lose (63.00) from holding Msif Core Portfolio or give up 2.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Msif Core Portfolio  vs.  Msif International Opportunity

Msif Core Portfolio

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Msif Core Portfolio are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Msif Us is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Msif International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Msif International Opportunity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Msif International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Msif Us and Msif International

The main advantage of trading using opposite Msif Us and Msif International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Msif Us position performs unexpectedly, Msif International 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 Msif International will offset losses from the drop in Msif International's long position.

The idea behind Msif Core Portfolio and Msif International Opportunity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.