Correlation Between Ab Global and Mfs Lifetime

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

By analyzing existing cross correlation between Ab Global Bond and Mfs Lifetime 2065, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Mfs Lifetime. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Mfs Lifetime.

Diversification Opportunities for Ab Global and Mfs Lifetime

-0.23

Correlation Coefficient

Ab Global  Mfs Lifetime

Very good diversification

The 3 months correlation between ANAGX and Mfs is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Bond 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 Ab Global 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 Ab Global Bond 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 Ab Global i.e., Ab Global and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Ab Global and Mfs Lifetime

Assuming the 90 days horizon Ab Global Bond is expected to under-perform the Mfs Lifetime. But the mutual fund apears to be less risky and, when comparing its historical volatility, Ab Global Bond is 2.48 times less risky than Mfs Lifetime. The mutual fund trades about -0.07 of its potential returns per unit of risk. The Mfs Lifetime 2065 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,016  in Mfs Lifetime 2065 on September 13, 2024 and sell it today you would earn a total of  41.00  from holding Mfs Lifetime 2065 or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ab Global Bond  vs.  Mfs Lifetime 2065

Ab Global Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ab Global Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Ab Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mfs Lifetime 2065

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mfs Lifetime 2065 are ranked lower than 9 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ab Global and Mfs Lifetime

The main advantage of trading using opposite Ab Global and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.

The idea behind Ab Global Bond and Mfs Lifetime 2065 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.