Correlation Between International Equity and Msif Core

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

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

Diversification Opportunities for International Equity and Msif Core

-0.53

Correlation Coefficient

International Equity  Msif Core

Excellent diversification

The 3 months correlation between International and Msif is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding International Equity Fund and Msif Core Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif Core Portfolio and International Equity 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 International Equity Fund are associated (or correlated) with Msif Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msif Core Portfolio has no effect on the direction of International Equity i.e., International Equity and Msif Core go up and down completely randomly.

Pair Corralation between International Equity and Msif Core

Assuming the 90 days horizon International Equity Fund is expected to under-perform the Msif Core. In addition to that, International Equity is 1.18 times more volatile than Msif Core Portfolio. It trades about -0.25 of its total potential returns per unit of risk. Msif Core Portfolio is currently generating about 0.05 per unit of volatility. If you would invest  2,752  in Msif Core Portfolio on October 6, 2024 and sell it today you would earn a total of  45.00  from holding Msif Core Portfolio or generate 1.64% return on investment over 90 days.

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

International Equity Fund  vs.  Msif Core Portfolio

International Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Equity Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Msif Core Portfolio

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Msif Core Portfolio are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Msif Core is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with International Equity and Msif Core

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

The idea behind International Equity Fund and Msif Core Portfolio 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.