Correlation Between Msif International and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Msif International 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 Msif International and Emerging Markets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Msif International Opportunity and Emerging Markets Portfolio, you can compare the effects of market volatilities on Msif International 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 Msif International with a short position of Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Msif International and Emerging Markets.
Diversification Opportunities for Msif International and Emerging Markets
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Msif and Emerging is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Msif International Opportunity and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por and Msif 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 Msif International Opportunity 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 Por has no effect on the direction of Msif International i.e., Msif International and Emerging Markets go up and down completely randomly.
Pair Corralation between Msif International and Emerging Markets
Assuming the 90 days horizon Msif International Opportunity is expected to generate 1.16 times more return on investment than Emerging Markets. However, Msif International is 1.16 times more volatile than Emerging Markets Portfolio. It trades about 0.08 of its potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.04 per unit of risk. If you would invest 2,662 in Msif International Opportunity on April 5, 2025 and sell it today you would earn a total of 674.00 from holding Msif International Opportunity or generate 25.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Msif International Opportunity vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Msif International |
| Emerging Markets Por |
Msif International and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Msif International and Emerging Markets
The main advantage of trading using opposite Msif International and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Msif International 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.| Msif International vs. Blackrock Financial Institutions | Msif International vs. Icon Financial Fund | Msif International vs. Prudential Financial Services | Msif International vs. Putnam Global Financials |
| Emerging Markets vs. Fidelity Advisor Financial | Emerging Markets vs. Vanguard Financials Index | Emerging Markets vs. Rmb Mendon Financial | Emerging Markets vs. Transamerica Financial Life |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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