Correlation Between Mfs Lifetime and Mfs High
Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Mfs High 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 Lifetime and Mfs High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Lifetime 2065 and Mfs High Yield, you can compare the effects of market volatilities on Mfs Lifetime and Mfs High 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 Lifetime with a short position of Mfs High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Mfs High.
Diversification Opportunities for Mfs Lifetime and Mfs High
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Mfs is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2065 and Mfs High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs High Yield and Mfs Lifetime 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 Lifetime 2065 are associated (or correlated) with Mfs High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs High Yield has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Mfs High go up and down completely randomly.
Pair Corralation between Mfs Lifetime and Mfs High
Assuming the 90 days horizon Mfs Lifetime 2065 is expected to generate 3.45 times more return on investment than Mfs High. However, Mfs Lifetime is 3.45 times more volatile than Mfs High Yield. It trades about 0.28 of its potential returns per unit of risk. Mfs High Yield is currently generating about 0.12 per unit of risk. If you would invest 1,028 in Mfs Lifetime 2065 on September 3, 2024 and sell it today you would earn a total of 32.00 from holding Mfs Lifetime 2065 or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Mfs Lifetime 2065 vs. Mfs High Yield
Performance |
| Timeline |
| Mfs Lifetime 2065 |
| Mfs High Yield |
Mfs Lifetime and Mfs High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Lifetime and Mfs High
The main advantage of trading using opposite Mfs Lifetime and Mfs High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Mfs High 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 High will offset losses from the drop in Mfs High's long position.| Mfs Lifetime vs. Prudential Core Conservative | Mfs Lifetime vs. Fidelity Advisor Diversified | Mfs Lifetime vs. Western Asset Diversified | Mfs Lifetime vs. Massmutual Select Diversified |
| Mfs High vs. Vanguard High Yield Corporate | Mfs High vs. Vanguard High Yield Porate | Mfs High vs. Blackrock Hi Yld | Mfs High vs. Blackrock High Yield |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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