Correlation Between Mfs International and Harding Loevner
Can any of the company-specific risk be diversified away by investing in both Mfs International and Harding Loevner 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 Mfs International and Harding Loevner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs International New and Harding Loevner International, you can compare the effects of market volatilities on Mfs International and Harding Loevner 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 Mfs International with a short position of Harding Loevner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs International and Harding Loevner.
Diversification Opportunities for Mfs International and Harding Loevner
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Harding is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Mfs International New and Harding Loevner International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harding Loevner Inte and Mfs 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 Mfs International New are associated (or correlated) with Harding Loevner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harding Loevner Inte has no effect on the direction of Mfs International i.e., Mfs International and Harding Loevner go up and down completely randomly.
Pair Corralation between Mfs International and Harding Loevner
Assuming the 90 days horizon Mfs International New is expected to under-perform the Harding Loevner. In addition to that, Mfs International is 2.6 times more volatile than Harding Loevner International. It trades about -0.21 of its total potential returns per unit of risk. Harding Loevner International is currently generating about -0.1 per unit of volatility. If you would invest 1,785 in Harding Loevner International on September 12, 2024 and sell it today you would lose (26.00) from holding Harding Loevner International or give up 1.46% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs International New vs. Harding Loevner International
Performance |
Timeline |
Mfs International New |
Harding Loevner Inte |
Mfs International and Harding Loevner Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs International and Harding Loevner
The main advantage of trading using opposite Mfs International and Harding Loevner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs International position performs unexpectedly, Harding Loevner 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 Harding Loevner will offset losses from the drop in Harding Loevner's long position.Mfs International vs. Oppenheimer Intl Small | Mfs International vs. Oppenheimer Intl Small | Mfs International vs. Oppenheimer Intl Small | Mfs International vs. Aquagold International |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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