Correlation Between Mfs Diversified and Mfs Lifetime

Can any of the company-specific risk be diversified away by investing in both Mfs Diversified 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 Diversified 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 Diversified Income and Mfs Lifetime Retirement, you can compare the effects of market volatilities on Mfs Diversified 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 Diversified with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Diversified and Mfs Lifetime.

Diversification Opportunities for Mfs Diversified and Mfs Lifetime

0.94

Correlation Coefficient

Mfs Diversified  Mfs Lifetime

Almost no diversification

The 3 months correlation between Mfs and Mfs is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Diversified Income and Mfs Lifetime Retirement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime Retirement and Mfs Diversified 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 Diversified Income 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 Retirement has no effect on the direction of Mfs Diversified i.e., Mfs Diversified and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Mfs Diversified and Mfs Lifetime

Assuming the 90 days horizon Mfs Diversified is expected to generate 1.09 times less return on investment than Mfs Lifetime. In addition to that, Mfs Diversified is 1.14 times more volatile than Mfs Lifetime Retirement. It trades about 0.6 of its total potential returns per unit of risk. Mfs Lifetime Retirement is currently generating about 0.74 per unit of volatility. If you would invest  1,181  in Mfs Lifetime Retirement on February 19, 2025 and sell it today you would earn a total of  45.00  from holding Mfs Lifetime Retirement or generate 3.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mfs Diversified Income  vs.  Mfs Lifetime Retirement

Mfs Diversified Income

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Diversified Income are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mfs Diversified is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Lifetime Retirement

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Lifetime Retirement are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Mfs Lifetime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mfs Diversified and Mfs Lifetime

The main advantage of trading using opposite Mfs Diversified and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Diversified 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.

The idea behind Mfs Diversified Income and Mfs Lifetime Retirement pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.