Correlation Between Small-cap Value and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Small-cap Value 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 Small-cap Value and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Value Fund and Mfs Lifetime 2065, you can compare the effects of market volatilities on Small-cap Value 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 Small-cap Value with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small-cap Value and Mfs Lifetime.
Diversification Opportunities for Small-cap Value and Mfs Lifetime
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Small-cap and Mfs is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Value Fund 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 Small-cap Value 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 Small Cap Value Fund 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 Small-cap Value i.e., Small-cap Value and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Small-cap Value and Mfs Lifetime
Assuming the 90 days horizon Small Cap Value Fund is expected to generate 2.55 times more return on investment than Mfs Lifetime. However, Small-cap Value is 2.55 times more volatile than Mfs Lifetime 2065. It trades about 0.31 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.16 per unit of risk. If you would invest 3,537 in Small Cap Value Fund on June 5, 2025 and sell it today you would earn a total of 311.00 from holding Small Cap Value Fund or generate 8.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Small Cap Value Fund vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Small Cap Value |
| Mfs Lifetime 2065 |
Small-cap Value and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small-cap Value and Mfs Lifetime
The main advantage of trading using opposite Small-cap Value and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small-cap Value 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.| Small-cap Value vs. Sit Government Securities | Small-cap Value vs. Franklin Adjustable Government | Small-cap Value vs. Us Government Securities | Small-cap Value vs. Jpmorgan Government Bond |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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