Correlation Between Armada Hflr and Mfs Lifetime

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

By analyzing existing cross correlation between Armada Hflr Pr and Mfs Lifetime 2035, you can compare the effects of market volatilities on Armada Hflr 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 Armada Hflr with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Armada Hflr and Mfs Lifetime.

Diversification Opportunities for Armada Hflr and Mfs Lifetime

0.56

Correlation Coefficient

Armada Hflr  Mfs Lifetime

Very weak diversification

The 3 months correlation between Armada and Mfs is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Armada Hflr Pr and Mfs Lifetime 2035 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Lifetime 2035 and Armada Hflr 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 Armada Hflr Pr 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 2035 has no effect on the direction of Armada Hflr i.e., Armada Hflr and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Armada Hflr and Mfs Lifetime

Considering the 90-day investment horizon Armada Hflr Pr is expected to generate 0.97 times more return on investment than Mfs Lifetime. However, Armada Hflr Pr is 1.03 times less risky than Mfs Lifetime. It trades about -0.29 of its potential returns per unit of risk. Mfs Lifetime 2035 is currently generating about -0.31 per unit of risk. If you would invest  1,086  in Armada Hflr Pr on October 1, 2024 and sell it today you would lose (80.00) from holding Armada Hflr Pr or give up 7.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Armada Hflr Pr  vs.  Mfs Lifetime 2035

Armada Hflr Pr

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Armada Hflr Pr has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, Armada Hflr is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Mfs Lifetime 2035

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mfs Lifetime 2035 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Armada Hflr and Mfs Lifetime

The main advantage of trading using opposite Armada Hflr and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Armada Hflr 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 Armada Hflr Pr and Mfs Lifetime 2035 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.