Correlation Between Jhancock Diversified and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Jhancock Diversified 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 Jhancock Diversified and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jhancock Diversified Macro and Mfs Lifetime 2065, you can compare the effects of market volatilities on Jhancock Diversified 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 Jhancock Diversified with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jhancock Diversified and Mfs Lifetime.
Diversification Opportunities for Jhancock Diversified and Mfs Lifetime
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Jhancock and Mfs is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Jhancock Diversified Macro 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 Jhancock Diversified 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 Jhancock Diversified Macro 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 Jhancock Diversified i.e., Jhancock Diversified and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Jhancock Diversified and Mfs Lifetime
Assuming the 90 days horizon Jhancock Diversified is expected to generate 6.15 times less return on investment than Mfs Lifetime. But when comparing it to its historical volatility, Jhancock Diversified Macro is 1.26 times less risky than Mfs Lifetime. It trades about 0.02 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 799.00 in Mfs Lifetime 2065 on November 27, 2024 and sell it today you would earn a total of 224.00 from holding Mfs Lifetime 2065 or generate 28.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jhancock Diversified Macro vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Jhancock Diversified |
| Mfs Lifetime 2065 |
Jhancock Diversified and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jhancock Diversified and Mfs Lifetime
The main advantage of trading using opposite Jhancock Diversified and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jhancock Diversified 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.The idea behind Jhancock Diversified Macro and Mfs Lifetime 2065 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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