Correlation Between Western Asset and Mfs Lifetime
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Mfs Lifetime into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Short and Mfs Lifetime 2065, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Mfs Lifetime.
Diversification Opportunities for Western Asset and Mfs Lifetime
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Mfs is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Short 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 Western Asset 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 Western Asset Short 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 Western Asset i.e., Western Asset and Mfs Lifetime go up and down completely randomly.
Pair Corralation between Western Asset and Mfs Lifetime
Assuming the 90 days horizon Western Asset is expected to generate 5.35 times less return on investment than Mfs Lifetime. But when comparing it to its historical volatility, Western Asset Short is 6.54 times less risky than Mfs Lifetime. It trades about 0.31 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,008 in Mfs Lifetime 2065 on May 2, 2025 and sell it today you would earn a total of 89.00 from holding Mfs Lifetime 2065 or generate 8.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Short vs. Mfs Lifetime 2065
Performance |
| Timeline |
| Western Asset Short |
| Mfs Lifetime 2065 |
Western Asset and Mfs Lifetime Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Mfs Lifetime
The main advantage of trading using opposite Western Asset and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Franklin Mutual Beacon | Western Asset vs. Templeton Developing Markets | Western Asset vs. Franklin Mutual Global | Western Asset vs. Franklin Mutual Global |
| Mfs Lifetime vs. Transamerica Emerging Markets | Mfs Lifetime vs. Lord Abbett Diversified | Mfs Lifetime vs. Gmo Emerging Markets | Mfs Lifetime vs. Sa Emerging Markets |
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 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.
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