Correlation Between Ab Municipal and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Ab Municipal 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 Ab Municipal and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Municipal Bond and Mfs Lifetime 2065, you can compare the effects of market volatilities on Ab Municipal 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 Ab Municipal with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Municipal and Mfs Lifetime.
Diversification Opportunities for Ab Municipal and Mfs Lifetime
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between AUNTX and Mfs is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Ab Municipal Bond 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 Ab Municipal 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 Ab Municipal Bond 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 Ab Municipal i.e., Ab Municipal and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Ab Municipal and Mfs Lifetime
Assuming the 90 days horizon Ab Municipal Bond is expected to generate 0.19 times more return on investment than Mfs Lifetime. However, Ab Municipal Bond is 5.17 times less risky than Mfs Lifetime. It trades about 0.39 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.04 per unit of risk. If you would invest 1,056 in Ab Municipal Bond on October 24, 2024 and sell it today you would earn a total of 10.00 from holding Ab Municipal Bond or generate 0.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Ab Municipal Bond vs. Mfs Lifetime 2065
Performance |
Timeline |
Ab Municipal Bond |
Mfs Lifetime 2065 |
Ab Municipal and Mfs Lifetime Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ab Municipal and Mfs Lifetime
The main advantage of trading using opposite Ab Municipal and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Municipal 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.Ab Municipal vs. Smead Value Fund | Ab Municipal vs. Calvert Large Cap | Ab Municipal vs. Qs Large Cap | Ab Municipal vs. Large Cap Growth Profund |
Mfs Lifetime vs. Needham Aggressive Growth | Mfs Lifetime vs. Rational Defensive Growth | Mfs Lifetime vs. Vy Columbia Small | Mfs Lifetime vs. Franklin Small Cap |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Transaction History View history of all your transactions and understand their impact on performance | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |