Correlation Between Core Fixed and Msif International

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

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

Diversification Opportunities for Core Fixed and Msif International

0.66

Correlation Coefficient

Core Fixed  Msif International

Poor diversification

The 3 months correlation between Core and Msif is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Core Fixed Income and Msif International Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msif International and Core Fixed 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 Core Fixed Income 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 Core Fixed i.e., Core Fixed and Msif International go up and down completely randomly.

Pair Corralation between Core Fixed and Msif International

Assuming the 90 days horizon Core Fixed Income is expected to generate 0.4 times more return on investment than Msif International. However, Core Fixed Income is 2.52 times less risky than Msif International. It trades about -0.14 of its potential returns per unit of risk. Msif International Advantage is currently generating about -0.07 per unit of risk. If you would invest  687.00  in Core Fixed Income on October 8, 2024 and sell it today you would lose (19.00) from holding Core Fixed Income or give up 2.77% of portfolio value over 90 days.

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

Core Fixed Income  vs.  Msif International Advantage

Core Fixed Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Core Fixed Income has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Core Fixed 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 Advantage 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 Core Fixed and Msif International

The main advantage of trading using opposite Core Fixed and Msif International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Core Fixed 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 Core Fixed Income and Msif International Advantage 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.