Correlation Between Mfs Total and Lord Abbett
Can any of the company-specific risk be diversified away by investing in both Mfs Total and Lord Abbett 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 Total and Lord Abbett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Total Return and Lord Abbett Diversified, you can compare the effects of market volatilities on Mfs Total and Lord Abbett 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 Total with a short position of Lord Abbett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Total and Lord Abbett.
Diversification Opportunities for Mfs Total and Lord Abbett
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Mfs and Lord is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Total Return and Lord Abbett Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lord Abbett Diversified and Mfs Total 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 Total Return are associated (or correlated) with Lord Abbett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lord Abbett Diversified has no effect on the direction of Mfs Total i.e., Mfs Total and Lord Abbett go up and down completely randomly.
Pair Corralation between Mfs Total and Lord Abbett
Assuming the 90 days horizon Mfs Total Return is expected to generate 0.6 times more return on investment than Lord Abbett. However, Mfs Total Return is 1.67 times less risky than Lord Abbett. It trades about -0.48 of its potential returns per unit of risk. Lord Abbett Diversified is currently generating about -0.31 per unit of risk. If you would invest 960.00 in Mfs Total Return on October 8, 2024 and sell it today you would lose (23.00) from holding Mfs Total Return or give up 2.4% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Mfs Total Return vs. Lord Abbett Diversified
Performance |
Timeline |
Mfs Total Return |
Lord Abbett Diversified |
Mfs Total and Lord Abbett Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Mfs Total and Lord Abbett
The main advantage of trading using opposite Mfs Total and Lord Abbett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Total position performs unexpectedly, Lord Abbett 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 Lord Abbett will offset losses from the drop in Lord Abbett's long position.Mfs Total vs. Versatile Bond Portfolio | Mfs Total vs. Bbh Intermediate Municipal | Mfs Total vs. Leader Short Term Bond | Mfs Total vs. Metropolitan West Porate |
Lord Abbett vs. Multisector Bond Sma | Lord Abbett vs. Bbh Intermediate Municipal | Lord Abbett vs. Pioneer Amt Free Municipal | Lord Abbett vs. Versatile Bond Portfolio |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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