Correlation Between Mfs Lifetime and Mfs International
Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Mfs International 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 International 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 International Large, you can compare the effects of market volatilities on Mfs Lifetime and Mfs International 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 International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Mfs International.
Diversification Opportunities for Mfs Lifetime and Mfs International
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2065 and Mfs International Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs International Large 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs International Large has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Mfs International go up and down completely randomly.
Pair Corralation between Mfs Lifetime and Mfs International
Assuming the 90 days horizon Mfs Lifetime 2065 is expected to generate 0.85 times more return on investment than Mfs International. However, Mfs Lifetime 2065 is 1.17 times less risky than Mfs International. It trades about 0.07 of its potential returns per unit of risk. Mfs International Large is currently generating about 0.04 per unit of risk. If you would invest 807.00 in Mfs Lifetime 2065 on November 27, 2024 and sell it today you would earn a total of 213.00 from holding Mfs Lifetime 2065 or generate 26.39% 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 International Large
Performance |
| Timeline |
| Mfs Lifetime 2065 |
| Mfs International Large |
Mfs Lifetime and Mfs International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Lifetime and Mfs International
The main advantage of trading using opposite Mfs Lifetime and Mfs International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Mfs International 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 International will offset losses from the drop in Mfs International's long position.| Mfs Lifetime vs. Artisan Small Cap | Mfs Lifetime vs. Touchstone Small Cap | Mfs Lifetime vs. Needham Small Cap | Mfs Lifetime vs. United Kingdom Small |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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