Correlation Between Jpmorgan Emerging and Mfs Lifetime

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

By analyzing existing cross correlation between Jpmorgan Emerging Markets and Mfs Lifetime 2065, you can compare the effects of market volatilities on Jpmorgan Emerging 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 Jpmorgan Emerging with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan Emerging and Mfs Lifetime.

Diversification Opportunities for Jpmorgan Emerging and Mfs Lifetime

0.69

Correlation Coefficient

Jpmorgan Emerging  Mfs Lifetime

Poor diversification

The 3 months correlation between Jpmorgan and Mfs is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Emerging Markets 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 Jpmorgan Emerging 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 Jpmorgan Emerging Markets 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 Jpmorgan Emerging i.e., Jpmorgan Emerging and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Jpmorgan Emerging and Mfs Lifetime

Assuming the 90 days horizon Jpmorgan Emerging is expected to generate 2.29 times less return on investment than Mfs Lifetime. In addition to that, Jpmorgan Emerging is 1.35 times more volatile than Mfs Lifetime 2065. It trades about 0.03 of its total potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.09 per unit of volatility. If you would invest  770.00  in Mfs Lifetime 2065 on December 2, 2024 and sell it today you would earn a total of  245.00  from holding Mfs Lifetime 2065 or generate 31.82% return on investment over 90 days.

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

Jpmorgan Emerging Markets  vs.  Mfs Lifetime 2065

Jpmorgan Emerging Markets

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Emerging Markets are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward-looking indicators, Jpmorgan Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Lifetime 2065

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mfs Lifetime 2065 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, 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 Jpmorgan Emerging and Mfs Lifetime

The main advantage of trading using opposite Jpmorgan Emerging and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Emerging 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 Jpmorgan Emerging Markets and Mfs Lifetime 2065 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.