Correlation Between Rems International and Mfs Global

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

By analyzing existing cross correlation between Rems International Real and Mfs Global Real, you can compare the effects of market volatilities on Rems International and Mfs Global 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 Rems International with a short position of Mfs Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rems International and Mfs Global.

Diversification Opportunities for Rems International and Mfs Global

0.88

Correlation Coefficient

Rems International  Mfs Global

Very poor diversification

The 3 months correlation between Rems and Mfs is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Rems International Real and Mfs Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Global Real and Rems International 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 Rems International Real are associated (or correlated) with Mfs Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Global Real has no effect on the direction of Rems International i.e., Rems International and Mfs Global go up and down completely randomly.

Pair Corralation between Rems International and Mfs Global

Assuming the 90 days horizon Rems International is expected to generate 1.87 times less return on investment than Mfs Global. But when comparing it to its historical volatility, Rems International Real is 1.14 times less risky than Mfs Global. It trades about 0.0 of its potential returns per unit of risk. Mfs Global Real is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,565  in Mfs Global Real on October 10, 2024 and sell it today you would earn a total of  8.00  from holding Mfs Global Real or generate 0.51% return on investment over 90 days.

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

Rems International Real  vs.  Mfs Global Real

Rems International Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rems International Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Mfs Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Rems International and Mfs Global

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

The idea behind Rems International Real and Mfs Global Real 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.