Correlation Between Saat Market and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Saat Market 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 Saat Market and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Saat Market Growth and Mfs Lifetime 2040, you can compare the effects of market volatilities on Saat Market 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 Saat Market with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Saat Market and Mfs Lifetime.
Diversification Opportunities for Saat Market and Mfs Lifetime
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Saat and Mfs is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Saat Market Growth and Mfs Lifetime 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2040 and Saat Market 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 Saat Market Growth 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 2040 has no effect on the direction of Saat Market i.e., Saat Market and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Saat Market and Mfs Lifetime
Assuming the 90 days horizon Saat Market is expected to generate 1.14 times less return on investment than Mfs Lifetime. But when comparing it to its historical volatility, Saat Market Growth is 1.13 times less risky than Mfs Lifetime. It trades about 0.23 of its potential returns per unit of risk. Mfs Lifetime 2040 is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,923 in Mfs Lifetime 2040 on November 4, 2024 and sell it today you would earn a total of 50.00 from holding Mfs Lifetime 2040 or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Saat Market Growth vs. Mfs Lifetime 2040
Performance |
| Timeline |
| Saat Market Growth |
| Mfs Lifetime 2040 |
Saat Market and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Saat Market and Mfs Lifetime
The main advantage of trading using opposite Saat Market and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Saat Market 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.| Saat Market vs. Ab Small Cap | Saat Market vs. Praxis Small Cap | Saat Market vs. Touchstone Small Cap | Saat Market vs. Hunter Small Cap |
| Mfs Lifetime vs. Lord Abbett Short | Mfs Lifetime vs. Virtus High Yield | Mfs Lifetime vs. City National Rochdale | Mfs Lifetime vs. Six Circles Credit |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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