Correlation Between Jpmorgan Diversified and Mfs Lifetime

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

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

Diversification Opportunities for Jpmorgan Diversified and Mfs Lifetime

0.91

Correlation Coefficient

Jpmorgan Diversified  Mfs Lifetime

Almost no diversification

The 3 months correlation between Jpmorgan and Mfs is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan Diversified 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 Jpmorgan Diversified 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 Jpmorgan Diversified 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 Jpmorgan Diversified i.e., Jpmorgan Diversified and Mfs Lifetime go up and down completely randomly.

Pair Corralation between Jpmorgan Diversified and Mfs Lifetime

Assuming the 90 days horizon Jpmorgan Diversified is expected to generate 1.17 times less return on investment than Mfs Lifetime. But when comparing it to its historical volatility, Jpmorgan Diversified Fund is 1.15 times less risky than Mfs Lifetime. It trades about 0.11 of its potential returns per unit of risk. Mfs Lifetime 2065 is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  893.00  in Mfs Lifetime 2065 on September 13, 2024 and sell it today you would earn a total of  167.00  from holding Mfs Lifetime 2065 or generate 18.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Jpmorgan Diversified Fund  vs.  Mfs Lifetime 2065

Jpmorgan Diversified

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Diversified Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Diversified 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 signals, 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 Jpmorgan Diversified and Mfs Lifetime

The main advantage of trading using opposite Jpmorgan Diversified and Mfs Lifetime positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan Diversified 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 Jpmorgan Diversified Fund 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.