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 2040 and Lord Abbett Affiliated, 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
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mfs and Lord is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2040 and Lord Abbett Affiliated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Affiliated 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 2040 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 Affiliated 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 is expected to generate 1.1 times less return on investment than Lord Abbett. But when comparing it to its historical volatility, Mfs Lifetime 2040 is 1.26 times less risky than Lord Abbett. It trades about 0.11 of its potential returns per unit of risk. Lord Abbett Affiliated is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,648 in Lord Abbett Affiliated on September 12, 2024 and sell it today you would earn a total of 299.00 from holding Lord Abbett Affiliated or generate 18.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Mfs Lifetime 2040 vs. Lord Abbett Affiliated
Performance |
| Timeline |
| Mfs Lifetime 2040 |
| Lord Abbett Affiliated |
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. Lord Abbett Affiliated | Mfs Lifetime vs. Dana Large Cap | Mfs Lifetime vs. Virtus Nfj Large Cap | Mfs Lifetime vs. Touchstone Large Cap |
| Lord Abbett vs. Vanguard Value Index | Lord Abbett vs. Dodge Cox Stock | Lord Abbett vs. American Mutual Fund | Lord Abbett vs. American Funds American |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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