Correlation Between Ms Global and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Ms Global and Emerging Markets 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 Ms Global and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ms Global Fixed and Emerging Markets Equity, you can compare the effects of market volatilities on Ms Global and Emerging Markets 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 Ms Global with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ms Global and Emerging Markets.
Diversification Opportunities for Ms Global and Emerging Markets
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MFIRX and Emerging is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ms Global Fixed and Emerging Markets Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Equity and Ms Global 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 Ms Global Fixed are associated (or correlated) with Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Equity has no effect on the direction of Ms Global i.e., Ms Global and Emerging Markets go up and down completely randomly.
Pair Corralation between Ms Global and Emerging Markets
Assuming the 90 days horizon Ms Global is expected to generate 2.97 times less return on investment than Emerging Markets. But when comparing it to its historical volatility, Ms Global Fixed is 5.62 times less risky than Emerging Markets. It trades about 0.23 of its potential returns per unit of risk. Emerging Markets Equity is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,607 in Emerging Markets Equity on August 25, 2025 and sell it today you would earn a total of 98.00 from holding Emerging Markets Equity or generate 6.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ms Global Fixed vs. Emerging Markets Equity
Performance |
| Timeline |
| Ms Global Fixed |
| Emerging Markets Equity |
Ms Global and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ms Global and Emerging Markets
The main advantage of trading using opposite Ms Global and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ms Global position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Ms Global vs. Emerging Markets Equity | Ms Global vs. Global Fixed Income | Ms Global vs. Global Fixed Income | Ms Global vs. Global Fixed Income |
| Emerging Markets vs. Profunds Large Cap Growth | Emerging Markets vs. Qs Growth Fund | Emerging Markets vs. Artisan Small Cap | Emerging Markets vs. Qs Growth Fund |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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