Correlation Between Columbia Moderate and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Columbia Moderate 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 Columbia Moderate and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Moderate Growth and Mfs Lifetime 2065, you can compare the effects of market volatilities on Columbia Moderate 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 Columbia Moderate with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Moderate and Mfs Lifetime.
Diversification Opportunities for Columbia Moderate and Mfs Lifetime
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Mfs is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Moderate Growth and Mfs Lifetime 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2065 and Columbia Moderate 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 Columbia Moderate Growth 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 2065 has no effect on the direction of Columbia Moderate i.e., Columbia Moderate and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Columbia Moderate and Mfs Lifetime
Assuming the 90 days horizon Columbia Moderate is expected to generate 1.13 times less return on investment than Mfs Lifetime. But when comparing it to its historical volatility, Columbia Moderate Growth is 1.18 times less risky than Mfs Lifetime. It trades about 0.09 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 869.00 in Mfs Lifetime 2065 on September 12, 2024 and sell it today you would earn a total of 195.00 from holding Mfs Lifetime 2065 or generate 22.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.72% |
| Values | Daily Returns |
Columbia Moderate Growth vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Columbia Moderate Growth |
| Mfs Lifetime 2065 |
Columbia Moderate and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Moderate and Mfs Lifetime
The main advantage of trading using opposite Columbia Moderate and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Moderate 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.| Columbia Moderate vs. Vanguard Total Stock | Columbia Moderate vs. Vanguard 500 Index | Columbia Moderate vs. Vanguard Total Stock | Columbia Moderate vs. Vanguard Total Stock |
| Mfs Lifetime vs. Columbia Moderate Growth | Mfs Lifetime vs. Transamerica Cleartrack Retirement | Mfs Lifetime vs. Blackrock Moderate Prepared | Mfs Lifetime vs. Qs Moderate Growth |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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