Correlation Between Firsthand Alternative and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Firsthand Alternative and Mfs Lifetime 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 Firsthand Alternative and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firsthand Alternative Energy and Mfs Lifetime 2040, you can compare the effects of market volatilities on Firsthand Alternative and Mfs Lifetime 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 Firsthand Alternative with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firsthand Alternative and Mfs Lifetime.
Diversification Opportunities for Firsthand Alternative and Mfs Lifetime
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Firsthand and Mfs is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Alternative Energy and Mfs Lifetime 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2040 and Firsthand Alternative 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 Firsthand Alternative Energy are associated (or correlated) with Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2040 has no effect on the direction of Firsthand Alternative i.e., Firsthand Alternative and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Firsthand Alternative and Mfs Lifetime
Assuming the 90 days horizon Firsthand Alternative Energy is expected to under-perform the Mfs Lifetime. In addition to that, Firsthand Alternative is 2.76 times more volatile than Mfs Lifetime 2040. It trades about -0.01 of its total potential returns per unit of risk. Mfs Lifetime 2040 is currently generating about 0.08 per unit of volatility. If you would invest 1,584 in Mfs Lifetime 2040 on September 4, 2024 and sell it today you would earn a total of 459.00 from holding Mfs Lifetime 2040 or generate 28.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firsthand Alternative Energy vs. Mfs Lifetime 2040
Performance |
| Timeline |
| Firsthand Alternative |
| Mfs Lifetime 2040 |
Firsthand Alternative and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firsthand Alternative and Mfs Lifetime
The main advantage of trading using opposite Firsthand Alternative and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Alternative position performs unexpectedly, Mfs Lifetime 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 Mfs Lifetime will offset losses from the drop in Mfs Lifetime's long position.| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
| Mfs Lifetime vs. Commonwealth Global Fund | Mfs Lifetime vs. Siit Global Managed | Mfs Lifetime vs. 361 Global Longshort | Mfs Lifetime vs. Scharf Global Opportunity |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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