Correlation Between Mfs Lifetime and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Lord Abbett 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 Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Lifetime 2060 and Lord Abbett Diversified, you can compare the effects of market volatilities on Mfs Lifetime and Lord Abbett 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 Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Lord Abbett.
Diversification Opportunities for Mfs Lifetime and Lord Abbett
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Lord is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2060 and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified 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 2060 are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Diversified has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Lord Abbett go up and down completely randomly.
Pair Corralation between Mfs Lifetime and Lord Abbett
Assuming the 90 days horizon Mfs Lifetime 2060 is expected to generate 1.99 times more return on investment than Lord Abbett. However, Mfs Lifetime is 1.99 times more volatile than Lord Abbett Diversified. It trades about 0.09 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about 0.11 per unit of risk. If you would invest 1,299 in Mfs Lifetime 2060 on September 5, 2024 and sell it today you would earn a total of 445.00 from holding Mfs Lifetime 2060 or generate 34.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Mfs Lifetime 2060 vs. Lord Abbett Diversified
Performance |
| Timeline |
| Mfs Lifetime 2060 |
| Lord Abbett Diversified |
Mfs Lifetime and Lord Abbett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Lifetime and Lord Abbett
The main advantage of trading using opposite Mfs Lifetime and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.| Mfs Lifetime vs. Adams Diversified Equity | Mfs Lifetime vs. T Rowe Price | Mfs Lifetime vs. Sentinel Small Pany | Mfs Lifetime vs. Pgim Jennison Diversified |
| Lord Abbett vs. T Rowe Price | Lord Abbett vs. Transamerica Asset Allocation | Lord Abbett vs. T Rowe Price | Lord Abbett vs. Virtus Dfa 2040 |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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