Correlation Between Madison Moderate and Mfs Lifetime

Can any of the company-specific risk be diversified away by investing in both Madison Moderate 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 Madison Moderate and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Madison Moderate Allocation and Mfs Lifetime Retirement, you can compare the effects of market volatilities on Madison Moderate 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 Madison Moderate with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Madison Moderate and Mfs Lifetime.

Diversification Opportunities for Madison Moderate and Mfs Lifetime

0.95

Correlation Coefficient

Madison Moderate  Mfs Lifetime

Almost no diversification

The 3 months correlation between Madison and Mfs is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Madison Moderate Allocation 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 Madison Moderate 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 Madison Moderate Allocation 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 Madison Moderate i.e., Madison Moderate and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Madison Moderate and Mfs Lifetime

Assuming the 90 days horizon Madison Moderate Allocation is expected to generate 1.49 times more return on investment than Mfs Lifetime. However, Madison Moderate is 1.49 times more volatile than Mfs Lifetime Retirement. It trades about 0.06 of its potential returns per unit of risk. Mfs Lifetime Retirement is currently generating about 0.05 per unit of risk. If you would invest  937.00  in Madison Moderate Allocation on February 15, 2025 and sell it today you would earn a total of  162.00  from holding Madison Moderate Allocation or generate 17.29% return on investment over 90 days.

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

Madison Moderate Allocation  vs.  Mfs Lifetime Retirement

Madison Moderate All

Risk-Adjusted Performance

Very Weak

Over the last 90 days Madison Moderate Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Madison Moderate 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 Madison Moderate and Mfs Lifetime

The main advantage of trading using opposite Madison Moderate and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Madison Moderate 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 Madison Moderate Allocation 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..