Correlation Between Mfs Lifetime and Mfs Value
Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Mfs Value 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 Value 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 Value Fund, you can compare the effects of market volatilities on Mfs Lifetime and Mfs Value 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 Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Mfs Value.
Diversification Opportunities for Mfs Lifetime and Mfs Value
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2065 and Mfs Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Value Fund 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 Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Value Fund has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Mfs Value go up and down completely randomly.
Pair Corralation between Mfs Lifetime and Mfs Value
Assuming the 90 days horizon Mfs Lifetime is expected to generate 1.57 times less return on investment than Mfs Value. But when comparing it to its historical volatility, Mfs Lifetime 2065 is 1.24 times less risky than Mfs Value. It trades about 0.14 of its potential returns per unit of risk. Mfs Value Fund is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 5,384 in Mfs Value Fund on August 29, 2024 and sell it today you would earn a total of 163.00 from holding Mfs Value Fund or generate 3.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Lifetime 2065 vs. Mfs Value Fund
Performance |
| Timeline |
| Mfs Lifetime 2065 |
| Mfs Value Fund |
Mfs Lifetime and Mfs Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Lifetime and Mfs Value
The main advantage of trading using opposite Mfs Lifetime and Mfs Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Mfs Value 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 Value will offset losses from the drop in Mfs Value's long position.| Mfs Lifetime vs. Hennessy Nerstone Mid | Mfs Lifetime vs. Lord Abbett Small | Mfs Lifetime vs. Amg River Road | Mfs Lifetime vs. Columbia Small Cap |
| Mfs Value vs. Mfs Aggressive Growth | Mfs Value vs. Mfs Research Fund | Mfs Value vs. Mfs Series Trust | Mfs Value vs. Mfs California Municipal |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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