Correlation Between Microsoft and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Microsoft and Mfs Lifetime 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 Microsoft and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microsoft and Mfs Lifetime 2030, you can compare the effects of market volatilities on Microsoft and Mfs Lifetime 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 Microsoft with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microsoft and Mfs Lifetime.
Diversification Opportunities for Microsoft and Mfs Lifetime
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Microsoft and Mfs is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft and Mfs Lifetime 2030 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2030 and Microsoft 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 Microsoft are associated (or correlated) with Mfs Lifetime. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Lifetime 2030 has no effect on the direction of Microsoft i.e., Microsoft and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Microsoft and Mfs Lifetime
Given the investment horizon of 90 days Microsoft is expected to generate 3.38 times more return on investment than Mfs Lifetime. However, Microsoft is 3.38 times more volatile than Mfs Lifetime 2030. It trades about 0.09 of its potential returns per unit of risk. Mfs Lifetime 2030 is currently generating about 0.1 per unit of risk. If you would invest 24,146 in Microsoft on August 30, 2024 and sell it today you would earn a total of 18,153 from holding Microsoft or generate 75.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microsoft vs. Mfs Lifetime 2030
Performance |
| Timeline |
| Microsoft |
| Mfs Lifetime 2030 |
Microsoft and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microsoft and Mfs Lifetime
The main advantage of trading using opposite Microsoft and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft position performs unexpectedly, Mfs Lifetime 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 Lifetime will offset losses from the drop in Mfs Lifetime's long position.| Microsoft vs. Palo Alto Networks | Microsoft vs. Uipath Inc | Microsoft vs. Block Inc | Microsoft vs. Adobe Systems Incorporated |
| Mfs Lifetime vs. Blrc Sgy Mnp | Mfs Lifetime vs. Touchstone Premium Yield | Mfs Lifetime vs. Calamos Dynamic Convertible | Mfs Lifetime vs. Ms Global Fixed |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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