Correlation Between Mfs Lifetime and Mfs Commodity

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

By analyzing existing cross correlation between Mfs Lifetime 2065 and Mfs Modity Strategy, you can compare the effects of market volatilities on Mfs Lifetime and Mfs Commodity 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 Mfs Commodity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Mfs Commodity.

Diversification Opportunities for Mfs Lifetime and Mfs Commodity

0.37

Correlation Coefficient

Mfs Lifetime  Mfs Commodity

Weak diversification

The 3 months correlation between Mfs and Mfs is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime 2065 and Mfs Modity Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mfs Modity Strategy 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 2065 are associated (or correlated) with Mfs Commodity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mfs Modity Strategy has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Mfs Commodity go up and down completely randomly.

Pair Corralation between Mfs Lifetime and Mfs Commodity

Assuming the 90 days horizon Mfs Lifetime is expected to generate 6.14 times less return on investment than Mfs Commodity. In addition to that, Mfs Lifetime is 1.07 times more volatile than Mfs Modity Strategy. It trades about 0.03 of its total potential returns per unit of risk. Mfs Modity Strategy is currently generating about 0.2 per unit of volatility. If you would invest  352.00  in Mfs Modity Strategy on December 27, 2024 and sell it today you would earn a total of  30.00  from holding Mfs Modity Strategy or generate 8.52% return on investment over 90 days.

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

Mfs Lifetime 2065  vs.  Mfs Modity Strategy

Mfs Lifetime 2065

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Lifetime 2065 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, Mfs Lifetime is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Mfs Modity Strategy

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Modity Strategy are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Mfs Commodity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Mfs Lifetime and Mfs Commodity

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

The idea behind Mfs Lifetime 2065 and Mfs Modity Strategy 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.