Correlation Between Mfs Lifetime and Vanguard Energy

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

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

Diversification Opportunities for Mfs Lifetime and Vanguard Energy

0.0

Correlation Coefficient

Mfs Lifetime  Vanguard Energy

Pay attention - limited upside

The 3 months correlation between Mfs and Vanguard is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2035 and Vanguard Energy Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Energy Index and Mfs Lifetime 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 Lifetime 2035 are associated (or correlated) with Vanguard Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Energy Index has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Vanguard Energy go up and down completely randomly.

Pair Corralation between Mfs Lifetime and Vanguard Energy

If you would invest  5,918  in Vanguard Energy Index on December 21, 2024 and sell it today you would earn a total of  548.00  from holding Vanguard Energy Index or generate 9.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

Mfs Lifetime 2035  vs.  Vanguard Energy Index

Mfs Lifetime 2035

Risk-Adjusted Performance

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 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.

Vanguard Energy Index

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Energy Index are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Energy may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mfs Lifetime and Vanguard Energy

The main advantage of trading using opposite Mfs Lifetime and Vanguard Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Vanguard Energy 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 Vanguard Energy will offset losses from the drop in Vanguard Energy's long position.

The idea behind Mfs Lifetime 2035 and Vanguard Energy Index 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.