Correlation Between Mfs Research and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Mfs Research 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 Mfs Research and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Research Fund and Mfs Lifetime 2065, you can compare the effects of market volatilities on Mfs Research 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 Mfs Research with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Research and Mfs Lifetime.
Diversification Opportunities for Mfs Research and Mfs Lifetime
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Mfs and Mfs is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Research Fund and Mfs Lifetime 2065 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2065 and Mfs Research 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 Research Fund 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 2065 has no effect on the direction of Mfs Research i.e., Mfs Research and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Mfs Research and Mfs Lifetime
Assuming the 90 days horizon Mfs Research Fund is expected to generate 1.22 times more return on investment than Mfs Lifetime. However, Mfs Research is 1.22 times more volatile than Mfs Lifetime 2065. It trades about 0.09 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.1 per unit of risk. If you would invest 4,836 in Mfs Research Fund on September 1, 2024 and sell it today you would earn a total of 1,395 from holding Mfs Research Fund or generate 28.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Research Fund vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Mfs Research |
| Mfs Lifetime 2065 |
Mfs Research and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Research and Mfs Lifetime
The main advantage of trading using opposite Mfs Research and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Research 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.| Mfs Research vs. Ivy Energy Fund | Mfs Research vs. Calvert Global Energy | Mfs Research vs. Oil Gas Ultrasector | Mfs Research vs. Dreyfus Natural Resources |
| Mfs Lifetime vs. James Balanced Golden | Mfs Lifetime vs. Gamco Global Gold | Mfs Lifetime vs. International Investors Gold | Mfs Lifetime vs. Goldman Sachs Esg |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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