Correlation Between Mfs Lifetime and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Mfs Lifetime and Target Retirement 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 Target Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mfs Lifetime Retirement and Target Retirement 2040, you can compare the effects of market volatilities on Mfs Lifetime and Target Retirement 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mfs Lifetime and Target Retirement.
Diversification Opportunities for Mfs Lifetime and Target Retirement
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mfs and Target is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Mfs Lifetime Retirement and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 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 Retirement are associated (or correlated) with Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Mfs Lifetime i.e., Mfs Lifetime and Target Retirement go up and down completely randomly.
Pair Corralation between Mfs Lifetime and Target Retirement
Assuming the 90 days horizon Mfs Lifetime is expected to generate 2.47 times less return on investment than Target Retirement. But when comparing it to its historical volatility, Mfs Lifetime Retirement is 2.48 times less risky than Target Retirement. It trades about 0.06 of its potential returns per unit of risk. Target Retirement 2040 is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,322 in Target Retirement 2040 on March 23, 2025 and sell it today you would earn a total of 54.00 from holding Target Retirement 2040 or generate 4.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mfs Lifetime Retirement vs. Target Retirement 2040
Performance |
| Timeline |
| Mfs Lifetime Retirement |
| Target Retirement 2040 |
Mfs Lifetime and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mfs Lifetime and Target Retirement
The main advantage of trading using opposite Mfs Lifetime and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mfs Lifetime position performs unexpectedly, Target Retirement 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 Target Retirement will offset losses from the drop in Target Retirement's long position.| Mfs Lifetime vs. Siit Ultra Short | Mfs Lifetime vs. Calvert Short Duration | Mfs Lifetime vs. Touchstone Ultra Short | Mfs Lifetime vs. Transam Short Term Bond |
| Target Retirement vs. Alternative Asset Allocation | Target Retirement vs. Nasdaq 100 Fund Investor | Target Retirement vs. Vanguard 500 Index | Target Retirement vs. Jp Morgan Smartretirement |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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