Correlation Between Mfs Lifetime and Mfs Intrinsic
Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Mfs Intrinsic 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 Intrinsic 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 Intrinsic Value, you can compare the effects of market volatilities on Mfs Lifetime and Mfs Intrinsic 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 Intrinsic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Mfs Intrinsic.
Diversification Opportunities for Mfs Lifetime and Mfs Intrinsic
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Mfs is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2065 and Mfs Intrinsic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Intrinsic Value 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 Intrinsic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Intrinsic Value has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Mfs Intrinsic go up and down completely randomly.
Pair Corralation between Mfs Lifetime and Mfs Intrinsic
Assuming the 90 days horizon Mfs Lifetime is expected to generate 1.14 times less return on investment than Mfs Intrinsic. But when comparing it to its historical volatility, Mfs Lifetime 2065 is 1.23 times less risky than Mfs Intrinsic. It trades about 0.1 of its potential returns per unit of risk. Mfs Intrinsic Value is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,163 in Mfs Intrinsic Value on September 1, 2024 and sell it today you would earn a total of 115.00 from holding Mfs Intrinsic Value or generate 9.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Lifetime 2065 vs. Mfs Intrinsic Value
Performance |
| Timeline |
| Mfs Lifetime 2065 |
| Mfs Intrinsic Value |
Mfs Lifetime and Mfs Intrinsic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Lifetime and Mfs Intrinsic
The main advantage of trading using opposite Mfs Lifetime and Mfs Intrinsic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Mfs Intrinsic 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 Intrinsic will offset losses from the drop in Mfs Intrinsic's long position.| Mfs Lifetime vs. James Balanced Golden | Mfs Lifetime vs. Gamco Global Gold | Mfs Lifetime vs. International Investors Gold | Mfs Lifetime vs. Goldman Sachs Esg |
| Mfs Intrinsic vs. Mfs Prudent Investor | Mfs Intrinsic vs. Mfs Prudent Investor | Mfs Intrinsic vs. Mfs Prudent Investor | Mfs Intrinsic vs. Mfs Prudent Investor |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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